Bitcoin price falls further as Genesis becomes latest crypto casualty

A multi-billion dollar lending unit of a cryptocurrency firm has been forced to halt withdrawals, the company’s CEO announced.

Genesis Global Capital, which had $2.8 billion in total active loans at the end of September, blamed the collapse of the crypto exchange FTX for temporarily suspending its services.

The price of bitcoin slid further following the news on Wednesday, with the cryptocurrency currently hovering above a two-year low.

Interim CEO Derar Islim told customers that Genesis’ trading and custody services remained fully operational.

Amanda Cowie, vice president of communications at Genesis owner Digital Currency Group (DCG), said that there was also “no impact on the business operations” of DCG and any of its subsidiaries.

“Today Genesis Global Capital, Genesis’s lending business, made the difficult decision to temporarily suspend redemptions and new loan originations,” Ms Cowie said.

“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.”

Bitcoin is down more than 75 per cent since hitting an all-time high of close to $69,000 in November 2021.

After several months of stability, bitcoin crashed below $16,000 for the first time since November 2020 following the downfall of FTX.

The world’s third largest exchange by trading volume suspended withdrawals of more than a million customers last week, according to court filings, after a liquidity crisis forced the firm to file for bankruptcy.

In a statement posted to Twitter, Genesis said it was working to avoid the same fate as FTX.

“We have hired the best advisors in the industry to explore all possible options,” the company wrote.

“Next week, we will deliver a plan for the lending business. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.”