As FTX casualties keep stacking up, shockwaves continue across the globe. This week, we saw Genesis Global Capital pause withdrawals after losing US$175 million with FTX. This in turn impacted Winklevoss-led exchange Gemini’s ‘Earn’ product. Yet it hasn’t stopped there, as Genesis’ FTX exposure has continued to wreak havoc further afield.
Luno impacted by Genesis
According to a report by My Broadband, Luno’s lending partner for its Savings Wallet product, Genesis Global Capital, temporarily suspended redemptions and new loan originations. All other withdrawals remain available at the time of publication.
“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion,” said Amanda Cowie, vice president of communications and marketing at Digital Currency Group (DCG), the holding company for both Luno and Genesis.
The exchange however assured users that all other funds remained safe and available.
French crypto broker follows suit
In addition to the impact on Luno, French crypto broker Coinhouse has also suspended withdrawals on its savings product.
Coinhouse partners with Genesis to offer the savings product, and with Genesis recently suspending their services amid the FTX meltdown, Coinhouse has similarly been dragged down in the process.
The news has received little coverage across crypto media and details remain scant at this stage. It is therefore unclear at this point whether users are able to withdraw their crypto from the exchange beyond the savings product.
FTX: Genesis Block feels the pinch
Unrelated to Genesis Global, a Hong Kong-based crypto exchange Genesis Block has ceased trading due to market turmoil from the FTX saga. The FTX collapse was seemingly the straw that broke the camel’s back, prompting the company to accelerate its process of winding down which has allegedly been taking place over the past year.
Speaking to Reuters, the CEO of the company, Wincent Hung, said that it had halted trading in light of the FTX collapse and it remained unclear who was next to go down with the ship.
“So we would rather close out all our positions to regain some of our liquidity.”
As part of the winding down process, the company is apparently asking its customers to withdraw their remaining funds and is no longer accepting new customers.
FTX: More to come?
Warren Buffet is famous for saying:
‘It’s only when the tide goes out that you know who’s swimming naked.”
In short, Buffet is suggesting that it is only during financial crises that the true extent of leverage and risk in the system is known. If anything, the FTX drama has clearly revealed who is swimming naked. With new revelations coming to light each day, undoubtedly there is more yet to come.