Genesis, one of the major cryptocurrency brokerages, has halted their withdrawals. According to The Verge, the source of crypto asset liquidity suspended redemptions and new loan originations, and it all boils down to the collapse of FTX. There has been an influx of withdrawal requests in fear of the future of crypto, and it has exceeded Genesis' "current liquidity."

Genesis Staying Afloat

They have acknowledged the part that FTX has played in the current challenges in the crypto world. Genesis stated via Twitter that they are doing everything they can to serve their clients, and navigate the current state of the market environment. This also goes for clients who are trying to manage the risks and execute their business strategies. They mentioned that the company's spot and derivatives trading, as well as custody businesses, remain operational.

They expressed that the collapse of FTX has brought forth market uncertainty, which has led to abnormal withdrawal requests. They justified the withdrawal halt, saying that they prioritize the client's assets, and aim to preserve them. This resulted in professional advisors and counsel deciding on a temporary suspension of withdrawals upon consultation.

Genesis has been provided with a $140 million equity infusion by Digital Currency Group (DCG), the venture capital group that owns the crypto brokerage. The currency group also came to Genesis' rescue when Three Arrows Capital, a crypto hedge fund, filed for bankruptcy.

Genesis Global Trading filed a $1.2 billion claim against the collapsed Singapore-based hedge fund, and DCG assumed the claim. This resulted in Genesis not having outstanding liabilities with Three Arrows Capital, as said in CoinDesk.

There have been reports that Genesis experienced an 80% decline in active loans, having $4.9 billion in Q2, but only $2.8 billion in Q3. There has also been a position shift, with COO Derar Islim taking the place of CEO Michael Moro. The firm lending the collapsed Three Arrows Capital $2.4 billion, may have also been the reason for the brokerage firm to lay off 20% of its staff.

Read Also: FTX Digital Markets' Asset Frozen by Bahamas Securities Regulator

FTX Left the Crypto Industry Scrambling

The collapse of the crypto firm FTX showed investors a glimpse of what might come, and this has caused them to pull funds from other exchanges as well. Even major cryptocurrencies are experiencing the effects. Bitcoin and Ether were among those that were affected. The smaller crypto firms are taking bigger hits, as mentioned in Forkast.

Caroline Bower, the CEO of BTC Markets Pty Ltd, stated that based on what was seen over the last week, there will still be fallout to come. However, Bitcoin and Ether are slowly recovering, as well as other smaller firms. Lachlan Feeney, the CEO, and founder of Labrys Group Pty advised anyone who had assets on any exchange to pull out. At least, until all is well again.

Seeing as FTX was a major firm, it had a lot of ties within the crypto industry. This may mean that it would take longer to recover from its demise. CEO of hedgefund ARk36, Anto Paroian, stated that it may even take weeks before all the effects of FTX's bankruptcy will dissipate.

Related: FTX Cryptocurrency Files for Bankruptcy, CEO Bankman-Fried Resigns