Who takes FTX? Genesis Global wobbles, concern about Gemini and shades of gray grows

In the wake of FTX’s demise, other heavyweights began rooting in the scene. But the news situation is bad, the developments of the various market parties are obscure. Genesis Global is officially in trouble. The crypto broker admitted this in a statement last Wednesday. Genesis Global had deposited $175 million in assets with FTX. Any loss has no effect, the broker initially assured on November 10. Now he crawls back.

Genesis Global’s services are aimed at companies and high net worth individuals looking to invest in the crypto market on a large scale. But not only that. Genesis Global services are also behind the “Earn” program of the crypto exchange Gemini.

The bankruptcy of the hedge fund 3AC and the crash of FTX led to liquidity problems, among other things, the company revises previous statements. It’s an extremely uncomfortable decision. As a direct result, Gemini also paused the harvesting program. Customers now fear for their savings.

Gemini is the crypto exchange of brothers Tyler and Cameron Winklevoss. As the “inventors” of Facebook (then ConnectU), the twins gained worldwide fame through the movie “The Social Network”. The two have been active in the crypto sector since 2013.

There is currently wild speculation about the future of Genesis Global. The most persistent rumor in the Wall Street Journal is that Genesis will need a $1 billion cash injection by Monday to keep operations going. The company has not yet commented on this, but promises that all other activities outside of lending are independent and unaffected. The crypto exchange Gemini sounds similar. There it is ensured that all client assets are safe – only the return program is affected.

The big problem: After the demise of 3AC, Terra, Celsius, Voyager and FTX, no one believes in such promises anymore. Genesis Global also initially exuded confidence. What the phrase “We stand by the coach 100 percent” means in football, is “Don’t worry, everything is safe with us” in the crypto scene. Rather than smoothing things over, such statements are interpreted as an announcement of a bang. This is mainly because the powder keg around Genesis Global is actually quite large.

Genesis Global is part of a conglomerate of parent company Digital Currency Group. These include other crypto heavyweights such as the world’s largest crypto fund Greyscale. It managed cryptocurrencies worth USD 50 billion in 2021. In the general uncertainty, there is now speculation that the blaze will spread from Genesis Global to Greyscale.

Grayscale, of all people, is fuel to the fire. The fund recently declined to disclose its own reserves. It was a security measure, it said Friday. As a representative, a letter from Coinbase was included. Coinbase is charged with storing Grayscale’s cryptocurrencies. According to the letter, Grayscale has 635,000 bitcoins and three million ethers, equivalent to $10 and $3.4 billion, respectively.

Besides Genesis Global, other prominent crypto players have lost money on FTX. The list is long: Galaxy Digital, Sequoya Capital, Galois Capital, BlockFi, Crypto.com, Wintermute, Multicoin Capital, Coin Shares, the Amber Group and also Pantera Capital.

You can guess three times: they all assure you that their very existence is not in danger.