According to a private fundraising document, Digital Currency Group's (DCG) flagship institutional trading business, Genesis Global, urgently required a $1 billion loan.
Before diving into this piece, you may want to catch up on some relevant stories, like how banks have already begun testing a digital dollar on the blockchain or how BlockFi is contemplating bankruptcy and layoffs after the collapse of the FTX.
According to the WSJ, Genesis was facing a liquidity crisis owing to the presence of certain illiquid assets on its balance sheet and required access to the loan by Monday morning at 10 a.m.
A Genesis representative stated the company's fundraising paperwork, which was drafted over the weekend but no longer exists, was the reason the company was unable to get the necessary loan funds.
The memo said that retail programs and partners of Genesis (such as Gemini Earn) and institutional customers were testing liquidity and causing a run on deposits.
The team has decided to temporarily halt withdrawals and new loan originations in the lending department while they figure out the best solution and outcome for customers, the spokeswoman said.
Genesis has announced that it has hired advisors to investigate all available options for the $175 million in locked funds in the Genesis derivatives business's FTX trading account.
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