Genesis estimated that establishing a recovery route for its loan operations would take a few extra weeks. To prevent a possible bankruptcy filing, Genesis, a cryptocurrency lending platform, informed its users that their withdrawal hold could endure extra weeks.
Derar Islim, the interim CEO who presumed temporary control of the company in August, wrote a letter to customers on December 7th that was shared with Cointelegraph. In the letter, Islim stated that it would take weeks to devise a recovery strategy that could lead to the reopening of withdrawals.
According to the letter, the company is considering the most efficient approach to preserve client reserves, increase their liquidity, and propel the business forward while cooperating with highly skilled experts.
Letter Drafted By Genesis Declares Its Current Crypto Operations
The letter also stated that all other Genesis organizations remain fully operating. On November 10th, the DCG’s trading platform, and lending arm, revealed that it has $175 million in money parked on the FTX cryptocurrency exchange. This was the first indication that the firm had exposure to FTX. On that very day, DCG tried to save the firm by infusing $140 million in cash.
As Genesis Global Capital restricted withdrawals on November 16th, citing severe market instability brought on by the crash of FTX, resulting in abnormal amounts of withdrawals that surpassed its liquidity, this didn’t seem to be enough to remedy its liquidity concerns.
The crypto banker reportedly failed to overcome a $1 billion hole on its balance sheet and announced on November 21st that it has no immediate plans to file for bankruptcy. Genesis reiterated in its letter their commitment to hold transparency and be as honest as possible with individuals who’d be impacted. It promised to keep consumers updated on important developments, including any further notifications on time.