Gemini is warning users of possible delays in withdrawing funds from Project Earn due to the suspension of the Genesis lending platform.
According to Gemini’s announcement, the exchange’s Earn Genesis lending partner Global Capital (Genesis) has suspended withdrawals and has been unable to meet its customer service level agreement (SLA) obligations for the past five business days.
The Earn product operated by Genesis allows users to earn interest on deposited crypto assets.
The exchange says it is in close contact with the Genesis team to assist clients trying to get their funds out of the Earn program as quickly as possible, and promises to provide more information in the coming days. The Gemini team says they are disappointed by the violation of the Earn maintenance agreement, but this event “will not affect other Gemini products and services.”
As of the end of the third quarter, Genesis Global Capital, the lending arm of crypto investment bank Genesis Global Trading, serves an institutional client base with a total loan portfolio of more than $2.8 billion. reportedthat problems with withdrawals and maintenance of current obligations of Genesis arose after the collapse of the FTX cryptocurrency exchange.
Genesis reported last week that its derivatives division has lost access to about $175 million of blocked funds in its FTX trading account. The panic caused by the sharp fall of the FTX exchange provoked a massive withdrawal request among Genesis customers from the platform, which ended up exceeding its current liquidity.
Over-the-counter cryptocurrency dealer Genesis Global Trading’s liquidity problems began back in June, when it became known that the company could face losses of hundreds of millions of dollars due to loss of liquidity by counterparties Three Arrows Capital and Babel Finance.
Source: Bits
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