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.”