The company said in a blog post that they were "working with the Genesis team" to restore withdrawals. Like Genesis, they tried to urge that the issue would not affect other Gemini products. However, a service outage that same day did little to strengthen trust in the company.
Gemini halts withdrawals from their lending service
The Gemini cryptocurrency platform announced that they would be pausing withdrawals on their lending platform. This is because they partner closely with Genesis' lending products, which halted withdrawals shortly before.
Genesis crypto lending service halts withdrawals
The crypto lending portion of Genesis Global Trading announced they would be halting withdrawals in the wake of the "extreme market dislocation and loss of industry confidence caused by the FTX implosion". On Twitter, they wrote that "FTX has created unprecedented market turmoil, resulting in abnormal withdrawal requests which have exceeded our current liquidity."
They urged in their announcement that the decision would not impact their trading or custody businesses — though if I was a user of their other services I might not be feeling so reassured given crypto companies' poor track record of segregating operations.
Genesis has about $2.8 billion in total active loans as of the end of September 2022.
This is not the first crisis for Genesis this year. The firm lost hundreds of millions due to exposure to the Three Arrows Capital collapse, and in August announced layoffs of 20% of their employees.
Coachella NFTs stop working due to FTX collapse
Coachella partnered with FTX to sell a collection of NFTs in February, ultimately raking in around $1.5 million. The NFTs were paired with physical items — Coachella passes, art prints, and photo books — and the NFT owners had the option to "redeem" their NFT to receive the item. However, all of this was done through FTX, and with FTX no longer fully operational, redemptions are no longer possible. The FTX server storing the artwork for the NFTs was also intermittently available, so holders reported seeing broken images when going to view their NFT.
Ten of the NFTs in the collection came with lifetime passes to Coachella, and sold for six figures. Each year, the NFT holder has to go through the redemption process to obtain their festival pass.
Many of the token owners bought their NFTs with FTX and simply left them in their accounts on the platform. Some were able to transfer their tokens before FTX's NFT platform stopped operating, but many did not.
Australian crypto exchange Digital Surge suspends withdrawals
The Brisbane-based cryptocurrency exchange Digital Surge announced that they would be suspending deposits and withdrawals. "Due to the impact of FTX Australia's administration, we are not able to operate business as usual and have suspended all deposits and withdrawals until further notice," they wrote. They also disclosed in an email that they had "some limited exposure to FTX".
- "Aust crypto exchange suspends withdrawals", Shepparton News
BlockFi plans layoffs, possible bankruptcy after FTX collapse
Cryptocurrency lending company BlockFi suspended withdrawals on November 10 after the FTX collapse, an expected move since they had stayed afloat after the previous crypto meltdown only thanks to hundreds of millions in loans from FTX.
Now, the Wall Street Journal reports that BlockFi has been considering layoffs, and has been in talks with bankruptcy attorneys about a possible Chapter 11 filing.
Although BlockFi disputed reports that they had been custodying client assets at FTX, they acknowledged that they had "significant exposure to FTX and associated corporate entities that encompasses obligations owed to us by Alameda, assets held at FTX.com, and undrawn amounts from our credit line with FTX.US".
- "BlockFi Prepares for Potential Bankruptcy as Crypto Contagion Spreads", The Wall Street Journal
SALT crypto lender halts their service
The crypto lending firm SALT announced that they would be halting withdrawals due to exposure to FTX. "I am sorry to report that the collapse of FTX has impacted our business," they wrote in a message to users. "Until we are able to determine the extent of this impact with specific details that we feel confident are factually accurate, we have paused deposits and withdrawals on the SALT platform effective immediately."
Binance announces an "industry recovery fund"
CZ of Binance announced on Twitter that Binance would be forming an "industry recovery fund", which he says is intended for projects that are "otherwise strong, but in a liquidity crisis".
This not entirely unlike someone trying to sell you a house that is "otherwise sturdy, but in an engulfed-in-flames crisis".
He says the project is intended to reduce the "cascading negative effects of FTX", underscoring how nervous this whole debacle is making other players in the industry.
Ikigai Asset Management announces "large majority" of assets trapped in FTX
The founder and chief investment officer of the Californian crypto hedge fund Ikigai Asset Management wrote on Twitter, "Last week Ikigai was caught up in the FTX collapse. We had a large majority of the hedge fund's total assets on FTX. By the time we went to withdraw Monday mrng, we got very little out. We're now stuck alongside everyone else."
He announced that they would continue trading their remaining assets, and continue operating their venture fund. However, he said the future of the hedge fund was unclear, and likely to depend on what happens with FTX customer withdrawals.
"I'm pretty disgusted with the space as a whole and kinda humanity in general," he continued. "I'm at a loss for words at the depth & breadth of the pieces of shit that permeate crypto. So many fucking sociopaths were granted the opportunity to do so much damage. It's hard for me to imagine the space bouncing back quickly from this ordeal. Too many got burned too hard."
Huobi exchange announces $18.1 million is locked on FTX, mostly customer funds
Huobi announced to shareholders that they had $18.1 million in crypto assets on the FTX exchange, where they can't be withdrawn. They reported that approximately $13.2 million of those funds were customer assets. They announced that they would be taking an unsecured loan of up to $14 million from controlling shareholder Li Lin to cover the client assets.
AAX cryptocurrency exchange suspends withdrawals
The Hong Kong-headquartered cryptocurrency exchange announced that they would suspend withdrawals, which they claimed was due to a system upgrade that went poorly. They've estimated it will taken seven to ten days for normal service to resume.
Users have been hesitant to believe this explanation, given the enormous shakeup in the industry lately, and the tendency for firms to be less-than-forthcoming when they are in major crisis.
Three days prior, the company had published a blog post claiming that AAX had no exposure to FTX and its affiliated companies, that AAX had stable reserves, and that user funds were never exposed to counterparty risk.