Genesis Halts Crypto Lending, Blames ‘FTX Implosion’

The move by Genesis does not affect its other business lines, including crypto trading

article-image

Blockworks exclusive art by axel rangel

share

The lending division of cryptoasset manager Genesis has put a halt to customer redemptions and new loan originations, a move that’s already disrupting crypto services across the ecosystem.

The decision stemmed from the building fallout of FTX’s collapse. Reverberations started with broader exchange liquidity issues triggered by a rush by big-money traders taking their digital assets off of exchanges in favor of safer cold-storage solutions.

Now, industry participants told Blockworks, the FTX contagion is spreading to crypto credit markets and hit one of their largest operators — Genesis.

Genesis executives explained the situation to institutional clients on a call Wednesday morning, according to a source familiar with the matter. Another source last week told Blockworks that Genesis was “functionally insolvent.” Sources were granted anonymity to discuss sensitive business dealings.

In a statement to Blockworks, a spokesperson said: “Genesis has three primary business lines: spot and derivatives trading, lending and borrowing, and custody. Our spot and derivatives trading and custody businesses remain fully operational.”

They added that with regards to its lending operations, the New York-based firm’s No. 1 priority is to “serve our clients and preserve their assets.”

“Therefore, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business. We are working diligently to shore up the necessary liquidity to meet our lending client obligations.”

Venture capital firm Digital Currency Group (DCG), the company’s main backer, wrote in a series of tweets Wednesday morning that the custody and trading arms of Genesis have not been affected.

Loading Tweet..

CoinDesk first the news of the halt to the crypto firm’s credit facilities.

Genesis appears to be “trying at all costs to avoid [bankruptcy],” a source said, which is “admirable, but costly.”

But suspending credit operations is not without consequence for the rest of the crypto space. Genesis provided backend lending operations for many exchange products that offer yield, including Gemini Earn, which advertises up to 8.05% interest paid on crypto deposits. 

Directly following Genesis’ announcement, Gemini Earn said it would cease processing Earn redemptions moving forward, with no timeline for when they’d be reactivated. Gemini said regular crypto withdrawals are unaffected.


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

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

zerebro.png

Research

Here we tackle the new crypto product ideas we expect agents to enable, reason about the value capture potential of different AI agent platform plays, and survey the current landscape of leading AI agent platform pureplays available to crypto investors today.

article-image

Despite the decades-long lead, there are spooky similarities between ETH and Intel stock

article-image

Some are calling for Solana to pump the brakes until validators are able to share the extra fees with stakers

article-image

Pantera junior partner Mason Nystrom details why projects need to raise capital

article-image

It’ll take time to “disentangle all these strands,” Peirce noted — ongoing litigation included

article-image

The victory lap the crypto industry has run since election night is bumping into some hurdles

article-image

The crypto custody firm’s goal was to “identify price points at which traders might consider the market to be overextended”