The US Bank of cryptocurrencies Genesis is working to preserve customer assets and strengthen liquidity, the company said in a letter to users on Wednesday, adding that formatting a plan to do so will take “weeks rather than days”.
Genesis lending arm Genesis Global Capital froze customer withdrawals on Nov. 16, citing “unprecedented market dislocation” following the collapse of cryptocurrency exchange FTX.
Genesis, controlled by venture capital firm Digital Currency Group (DCG), said last week it was trying to avoid filing for bankruptcy.
“Working with highly experienced consultants and in close collaboration with our owner, DCG, we are evaluating the most effective path to preserve client assets, strengthen our liquidity and ultimately move our business forward,” Genesis said in the letter.
“We anticipate it will take additional weeks, rather than days, for us to find a way forward.”
All other parts of Genesis’ business are “fully operational”, he added.
Genesis had a loan portfolio of nearly $3 billion at the end of the third quarter. Last year, the bank made $130.6 billion in digital currency-based loans and traded $116.5 billion in assets.
Genesis and Digital Currency Group owe customers of the Winklevoss twins’ cryptocurrency exchange, Gemini, $900 million, the Financial Times reported on Saturday.
Gemini said in a statement on its website Nov. 16 that it has partnered with Genesis for its “Earn” income generation program. Customers of this product ended up being prevented from redeeming their funds when Genesis froze withdrawals.
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