Binance’s CZ Looking Into Acquiring Genesis Loan Book: Source

A source suggests that Genesis’ loan book may not be up for grabs, even as it pauses withdrawals


Source: Shutterstock


It started with CZ. It might end with CZ.

The founder of Binance, the world’s largest cryptocurrency exchange, is reported to be interested in acquiring Genesis’ loan book.

Blockworks spoke with a source familiar with the matter who explained that Changpeng ‘CZ’ Zhao has begun reaching out for more information on the state of Genesis’ balance sheet as he considers a potential bid for Genesis’ loan assets. Genesis includes $2.8 billion in active loans in its Q3 2022 report.

Another source noted that any approach is likely to be rebuffed by Genesis’ parent company, Digital Currency Group (DCG), and that a figure north of $2 billion would need to be floated.

Last week, Zhao’s Twitter proclamations instigated the bank run that toppled FTX, which was sporting a huge target on its back following revelations that its balance sheet was risible — and likely fraudulent.

And, as FTX fell, it became clear that the degree of interconnectedness in the crypto industry that caused shockwaves in May and June persists.

Back then, it was Three Arrows Capital’s collapse, following the depegging of the algorithmic stablecoin project from Terraform Labs, that wiped out the remnants of last year’s bull market.

This time, Zhao may have spread enough contagion within the crypto industry to emerge as its undisputed leader. Binance had not returned a request for comment at the time of publication.

Multiple funds, service providers, lending and yield platforms throughout the crypto business had exposure to FTX, and as investors pulled their money from exchanges and stablecoins, those businesses began to feel the pinch of liquidity issues.

With liquidity evaporating, even the largest prime brokers were affected — among them Genesis Trading’s lending platform. Genesis is a wholly owned subsidiary of Digital Currency Group and did not respond to a request for comment.

Genesis already suffered losses in the hundreds of millions of dollars during the crypto collapse in May, and it reported direct exposure of $175 million to FTX last week. DCG funneled $140 million in equity into Genesis as an emergency stopgap.

Founder Barry Silbert describes DCG in his LinkedIn profile, without hyperbole, as sitting at “the epicenter of the bitcoin and blockchain industry.” With assets under management estimated at more than $50 billion, and investments in dozens of blockchain-based startups and early-stage crypto companies, any hint of DCG vulnerability could easily undermine what’s left of investor trust in the crypto industry.

If CZ has the reserves to acquire Genesis’ portfolio, Binance’s position at the apex of the crypto pyramid could be consolidated. A major rival will have been wiped off the map, and CZ might even find himself in a position to decide whether to continue powering the lending programs of other competitors — including two stablecoin issuers, Gemini and Circle, that compete directly with the BUSD Binance stablecoin issued by Paxos.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.


Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Screen Shot 2024-05-16 at 14.53.45.png


Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. This report dives into the world of LVR. We uncover its importance for AMM designers, discuss the two major mechanism design categories and various projects developing solutions, and offer a higher level perspective on the importance of AMMs in general.


Yesterday saw Congress’ upper chamber side with the House on a measure aimed at overturning SAB 121


Oklahoma’s new crypto bill will go into effect in November of this year


The deposits hit a $20 million cap in just 45 minutes


Twelve Democratic Senators voted in favor to pass the resolution Thursday

article-image is “aware” that bonding curve contracts on were exploited, and has since paused trading


Some investment pros are mulling crypto allocations between 1% and 10% and seeking ex-BTC exposure for interested clients