Mooners and Shakers: FTX contagion spreads to Genesis’ crypto lending unit and Gemini’s yield service

Coinhead Rob Badman
Genesis crypto

Getty Images

Bitcoin and the total crypto market is holding on to a level of support or two for the moment, as the FTX fallout today continues to keep everyone on edge.

Especially those with exposure to Genesis Global Trading’s lending platform – and crypto exchange Gemini’s yield program, too.

The crypto contagion is spreading and we’re slowly seeing who’s left butt naked with Costanza-like shrinkage as the tide rolls out, or whatever it was that Warren Buffett said.

Buffett’s offsider Charlie Munger incidentally compared Bitcoin with child trafficking earlier this week. Er, righto, Mr Munger – probably not one of your best. (He’s 98 – we have to call him that.)

 

Genesis gets the FTX invisible touch

“It takes control, and slowly tears you apart,” wrote Genesis. The band – in 1986.

Following on from crypto lenders BlockFi and SALT halting customer withdrawals this week, along with the Japanese exchange Liquid Global, this morning’s news is that Genesis Global is the latest to catch the disease.

Specifically, the lending unit of the Genesis Trading arm, which has now also suspended withdrawals from that part of the platform.

Citing “extreme market dislocation” caused by FTX’s collapse, the Genesis Global Capital lending entity is “pausing new loan originations and redemptions” – per a series of tweets from the Genesis firm overnight (AEDT).

The firm maintains that other parts of the company are still in a solid state, including its spot and derivatives trading services, which remain fully operational. 

While everyone in the crypto industry must surely be getting a bit numb to this sort of news by now, it’s potentially a bit of a big deal this one.

As the Blockworks news site’s founder Jason Yanowitz tweets, it’s significant because Genesis operates crypto’s largest lending desk and is part of Digital Currency Group (DCG), which, like FTX has far-reaching tentacles across the industry.

 

Wait, Gemini, too?

Blockworks’ Yanowitz goes on to further explain in his thread why the Genesis news is so bad.

And it’s because “dozens of companies like Gemini [the big Winklevoss twins-owned crypto exchange] use Genesis to help their consumers earn yield. If you’re a CeFi platform that offers yield, you probably use Genesis,” he writes.

In other words, it’s potentially a lot of companies with a lot of exposure to another big player in a lending and borrowing system to create yield, that could all be unravelling behind the scenes.

And what about Gemini, then – not Genesis – Gemini?

As a result of Genesis pausing its lending business, the Gemini exchange has now halted its Earn program, which is a way for its customers to earn yields of up to 8% annually on their deposited crypto. 

Assets in that program are supposed to be available within five business days of customer request, according to Gemini. 

 

To make matters worse for already highly spooked investors and users of the Gemini, the exchange  went down in a server outage for a bit less than an hour, the platform revealed on Twitter. It’s back up and running now, though.

Hey, Crypto Industry, can we get a mood check right now, please?

Yep, pretty much as we thought. Seen worse, though. Let’s check in with some price action.

 

Top 10 overview

With the overall crypto market cap at US$883 billion, up 2% since this time yesterday, here’s the current state of play among top 10 tokens – according to CoinGecko.

Redness. But like the “extremely fearful” crypto market sentiment, above, it could be worse. Maybe it will be soon.

Let’s check in with some of the better known crypto-trading analysts to get their vibe. Over to you, Justin Bennett:

Okay. How about Roman Trading…

Blimey. He appears to be slowly dollar-cost averaging in, though. So there’s that.

How about you, Rekt Capital?

 

Uppers and downers: 11–100

Sweeping a market-cap range of about US$6.67 billion to about US$320 million in the rest of the top 100, let’s find some of the biggest 24-hour gainers and losers at press time. (Stats accurate at time of publishing, based on CoinGecko.com data.)

DAILY PUMPERS

• Aptos (APT), (market cap: US$611 million) +10%

• Trust Wallet (TWT), (mc: US$902 million) +9%

• Chiliz (CHZ), (mc: US$1.2 billion) +5%

• OKB (OKB), (mc: US$4.8 billion) +3%

• Monero (XMR), (mc: US$2.4 billion) +2%

 

DAILY SLUMPERS

• Tokenize Xchange (TKX), (market cap: US$577 million) -17%

• Kava (KAVA), (market cap: US$338 million) -10%

• Radix (XRD), (mc: US$476 million) -10%

• Maker (MKR), (mc: US$552 million) -7%

• Huobi (HT), (mc: US$612 million) -7%

 

Around the blocks

A selection of rumour, randomness and pertinence that stuck with us on our morning moves through the Crypto Twitterverse…

Yesterday, this column incorrectly assumed former FTX CEO had wrapped up his lengthy stream-of-consciousness Twitter thread. Check back in with the embattled FTX founder’s thoughts here if you can bear it.

Oh, and there’s this:

Looks like NFL legend Tom Brady, Giselle Bundchen, NBA stars Stephen Curry and Shaquille O’Neal and about eight other high-profile celebrity endorsers are being sued in a class action lawsuit filed in the US for their part in promoting FTX.

You can read more here.

Related Topics

BitcoinCryptocurrencyEthereum

Related Stories