If crypto lender Genesis can't find $1 billion soon, it may be forced into bankruptcy — becoming the latest victim of the FTX exchange's implosion earlier this month.
If crypto lender Genesis can't find $1 billion soon, it may be forced into bankruptcy — becoming the latest victim of the FTX exchange's implosion earlier this month.
It's an increasingly familiar pattern that began with lenders like Voyager Digital back in July, when the $48 billion collapse of the Terra/LUNA stablecoin in May drove crypto hedge fund Three Arrows Capital into bankruptcy — revealing that it had taken out billions in loans without collateral from a large number of crypto lenders.
But more than anything, Genesis' troubles are indicative of the way the financial troubles of one company spread throughout the crypto industry.The 3AC collapse that initiated the first round of crypto lenders' troubles was a result of the Terra/LUNA stablecoin collapse. Among those hit are many customers of cryptocurrency exchange Gemini, which ran its crypto yield program, Gemini Earn, through Genesis. Crypto lenders borrow funds via yield programs which pay high returns — Gemini Earn topped out at 8%, which is fairly low — for the funds they lend out.Much like DCG has had to reassure investors that its flagship Grayscale arm, which holds about $10.
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