Genesis told clients it needs more time to fix its borrowing and lending intermediation business.
“We remain focused on finding a solution for our borrowing and lending intermediation business and reaching the best outcome for all affected clients,” Genesis Global Capital Interim CEO Derar Islim said in a Wednesday (Jan. 4) letter, adding that the company continues to work with advisors to evaluate options to preserve client assets and move the business forward.
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time,” Islim said in the letter.
Genesis announced in November that it was pausing withdrawals from its lending arm as a result of “unprecedented market turmoil.” Its trading arm, Genesis Trading, disclosed at the time that it had $175 million in funds locked in its FTX trading account. The lender was seeking a fresh capital injection of nearly $1 billion for its lending unit to help weather the turmoil of FTX’s demise.
More than 130 FTX Group companies filed for bankruptcy protection in November.
The parent company of Genesis, Digital Currency Group (DCG), stepped in to provide Genesis with $140 million in equity.
In early December, it was reported that Genesis owes $900 million to Gemini and that co-founders and brothers Tyler and Cameron Winklevoss were trying to recover the funds.
Genesis was the main partner in Gemini’s “earn” program, where retail investors lend out cryptocurrency and get a fixed stream of returns. Gemini halted withdrawals from the program in November after Genesis said it lacked the liquidity to cover its redemption requests.
In his Wednesday letter to clients, Islim said that Genesis’ derivatives and spot trading businesses remain fully operational.
He added that the company continues to refine its business plans for its client offerings and has reduced costs and driven efficiencies in all its business lines.
“We believe our continued focus on further sharpening our business will move us in the right direction as we begin the new year, as well as providing more options for working out the lending business,” Islim said in the letter.
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