© Reuters
Investing.com – After BlockFi, which had already stopped disbursing funds, it’s cryptocurrency lender Genesis’s turn to take a hit. Genesis was already struggling, as cryptocurrency lending activity contracted to $8.4 billion in the third quarter.
In the first quarter, the business volume in this area still amounted to 44.3 billion dollars. Added to this is the fact that the crypto-hedge fund Three Arrows Capital was granted a loan of $ 2.4 billion which went bankrupt and that, according to court documents, only half of this amount was returned to Genesis.
Last week, Genesis had already had to secure a $140 million injection from its parent company, Barry Silbert’s Digital Currency Group. This became necessary after it became clear that they no longer had access to an FTX trading account that held $175 million.
Grayscale assured its customers that all funds were safe, which was urgent given the problems faced by its business partner Genesis:
“In light of recent events, our investors should be aware that the security of the assets underlying Grayscale’s digital investment products will not be compromised.”
Binance CEO Changpeng Zhao also reacted immediately to prevent the Genesis problems from spreading to his company in a speculative manner:
“Binance does not rely on Genesis or any other third-party providers for its yield products.”
With this new bad news, the hit its low for the day at $16,422, while fell more than 5% to $1,201.
By Marco Oehrl