Client funds at Gemini are safe as the lending and earning arm is independent of the cryptocurrency exchange.
Genesis Global Capital, the cryptocurrency lending arm of the Gemini exchange, has announced that stops withdrawals and new loans from its Earn service, due to market volatility and the delicate situation caused by the FTX crash.
Genesis Interim CEO Derar Islim has explained to customers that the platform is pausing withdrawals while they explore solutions. At the moment, no option is ruled out and work is being done actively seeking liquidity, in order to resume operations and cover customer funds.
Islim also explained that throughout the next week, Genesis will publish a detailed plan to keep customers informed.
In a call with clients, the CEO has also reassured users of its custody and trading services (mostly institutional clients), through Genesis Trading, assuring that remain fully operational, since they have a capitalization and operation independent of the lending platform.
The decision, according to the communications department, was taken due to market instability and the lack of investor confidence, caused by the fall of FTX during the week.
In this way, Genesis would join other platforms affected by the FTX debacle such as the blockf, Liquid SALT.
On the other hand, from the communication office of Gemini, the exchange run by the Wincklevoss twins, they have explained that the clients' funds They are safe and stay 1:1, available for immediate withdrawal at any time.
Even though the fall of FTX has caused unprecedented instability in the market, some actors, such as Dr. Anna Becker, CEO and co-founder of the investment firm EndoTech, believe that will serve to build a better sector.
Becker explains that regulators will need to act quickly and create a framework that regulates and controls the sector, preventing clients' funds from being managed irresponsibly in the future and that is not transparent, as has happened in the case of FTX.
Grayscale Investments, the digital asset manager that is also part of Digital Currency Group, the parent company of Genesis Global Capital, has announced on Twitter that its clients' funds will not be affected due to the pause in Genesis withdrawals as the lending platform does not offer services to Grayscale.
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