Tuesday, September 26, 2023
HomeEthereum‘In Huge Trouble’—Leak Reveals $10 Billion Earthquake Could Be About To Cause...

‘In Huge Trouble’—Leak Reveals $10 Billion Earthquake Could Be About To Cause Bitcoin And Ethereum Price Chaos

And cryptocurrencies remain reeling due to the sudden collapse of major crypto exchange FTX this month (Elon Musk Released Surprise Crypto Predictions for 2023).

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Bitcoin price plummets to below $17,000 per bitcoin from nearly $70,000 12 months ago, Ethereum collapses towards $1,000 per ether JP Morgan warns price crash may be just beginning.

Now, $10 billion Bitcoin and crypto giant Digital Currency Group (DCG) is seeking a $1 billion emergency loan after crypto lender Genesis was forced to suspend withdrawals. Concerns swirled that there could be problems after reports surfaced that

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This week, Genesis, one of the largest crypto lenders that forms part of DCG’s vast crypto empire, has suspended redemption of customers in its lending business, blaming the sudden FTX meltdown. did. DCG, last year reportedly Worth $10 billion, it also owns Bitcoin and cryptocurrency miner Foundry, asset manager Grayscale, cryptocurrency exchange Luno, and news outlets. coin desk.

Ahead of the withdrawal moratorium, Genesis asked investors for an emergency loan of $1 billion. report by wall street journalcited leaked funding documents to describe a “liquidity crisis due to certain illiquid assets” [Genesis’] Balance sheet. “

“There have been targets behind Genesis for days,” said Joseph Edwards, an investment partner at Securitize Capital. Said ReutersHe added that due to Genesis’ close relationship with brokers, family offices and money managers, this is a “bad outcome signal” for the cryptocurrency market.

FTX’s sudden collapse this month was caused in part by reports that a significant portion of its balance sheet was made up of the illiquid cryptocurrencies it created. filed for bankruptcy protection, and its founder Sam Bankman-Fried (SBF) resigned as CEO.

“Genesys was exploring all possible options amid the liquidity crisis caused by the FTX news,” a company spokesperson said. journal“After considering many options, we have made the difficult decision to temporarily suspend redemptions and new loan initiations in our lending business so that we can identify the best possible solutions and outcomes for our clients. ”

The Genesis situation heated up shortly after the FTX implosion, causing consternation among the cryptocurrency community. Crypto skeptics are predicting what could be the next domino toppling amid rumors swirling about the future of crypto exchange Gemini and crypto financial services firm Galaxy. Digital.

“[Genesis, Grayscale, Galaxy, Gemini are] Everything is in big trouble right now and it’s crumbling,” said Noriel Roubini, a New York University economics professor known as Dr. Doom. Posted to Twitter. “From the moon, all the madmen are now crashing into the earth.”

Cory Klippsten, an outspoken critic of non-bitcoin cryptocurrencies and CEO of bitcoin buying app Swan Bitcoin, said, “Genesis just doesn’t look like it.” Posted on Twitter in reference to unconfirmed social media rumors that DCG is desperate “to sell Genesis loan books.”

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Forbes details“Undervalued” – Coinbase CEO Reveals “Bullish” Crypto Predictions After $200 Billion FTX Bitcoin and Ethereum Prices Crash

But parts of the bitcoin and cryptocurrency space remain unfazed by a string of negative reports.

Martin Hiesboeck, Uphold’s head of blockchain and cryptocurrency research, said in an emailed comment that “in the long run, this is unlikely to significantly set back the digital asset space.” .

“The risk of contagion has never been higher, but we believe it can be ignored. Let’s not forget how small the space is still. This is not an Enron or Lehman moment. Most involved in the scandal For companies from Sequoia to Tiger and Circle, the money involved is pennies.”


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