(Kitco News) - In the beginning, things may have been good for crypto businesses named Genesis. But in the wake of the FTX collapse, as investors face a formless void and darkness covers the markets, they saw that it was bad.
Genesis Block, Hong Kong’s leading retail crypto operator, told customers on Friday morning that it plans to close its over-the-counter trading portal on Dec. 10. The company email also asked customers to withdraw their funds and said that they will not accept new customers.
Earlier this week, Genesis Block’s CEO told Reuters that they’re no longer active in crypto markets.
"We have ceased trading," Wincent Hung told Reuters this week. “We don't know which counterparties would fail next, so we would rather close out all our positions to regain some of our liquidity.”
Genesis Block actually began winding down its Hong Kong crypto business before FTX declared bankruptcy, according to the report. One Genesis Block official was a director at FTX Hong Kong, but resigned from their position earlier in November, and Genesis Block cut all ties with the failed exchange soon afterward.
Genesis Block once operated one of the biggest bitcoin ATM networks in Asia. The ATMs are now operated by CoinHero after Genesis Block sold their ATM business in 2021.
On Thursday night, markets received more bad news from Genesis Global Capital (GGC), another crypto firm which suspended customer redemptions in their loan business earlier this week.
This Genesis faced a liquidity shortage of biblical proportions, as reports emerged that they were scrambling to raise $1 billion before last Monday to continue operating. GGC told customers on Nov. 10 that they had $175 million stuck in FTX. Genesis had $2.8 billion in active loans at the end of Q3 2022.
Venture capital firm Digital Capital Group (DCG), the parent company of Genesis, tweeted Wednesday morning that the decision to freeze Genesis’ loan division was made “in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.”
DCG also owns Grayscale, whose $11 billion in bitcoin make them one of the largest holders in the world.
The monotheistic platforms also impacted Greek astrology as Crypto exchange Gemini, which is owned by the Winklevoss twins and is partnered with Genesis, announced that their Earn program was impacted by the lending freeze.
“We are working with the Genesis team to help customers redeem their funds from the Earn program as quickly as possible,” they wrote, adding that they were “disappointed” that Genesis’ obligations to their clients could not be met under the SLA, but they were “encouraged” by the efforts made by Genesis and DCG to address the problems.
Blockchain analytics platform Nansen reported Thursday that Gemini saw $570 million in net outflows over 24 hours, more than any other crypto exchange during that period.
And Friday morning also brought reports that South Korean crypto exchange GOPAX had halted withdrawals of principal and interest payments on GOFi, its decentralized finance (DeFi) service, which brokers products from GGC.
GOPAX said it had requested repayment from Genesis of all GOFi assets prior to the lending freeze.
On the seventh day since FTX declared bankruptcy, exchanges are no doubt hoping crypto gives them some rest.