$175M Of Funds Locked In FTX, Crypto Broker Genesis Reveals
Genesis Trading, Digital Currency Group's market maker and lending arm, reported that its derivatives firm had around $175 million in funds locked up in an FTX trading account.
Genesis announced the news in a tweet thread on Nov. 10, clarifying that the locked funds will "not impact our market-making activities."
While Genesis stated that its capital and positions in FTX would not prevent the "full functioning of our trading franchise," it remains to be seen whether its parent company Digital Currency Group will be forced to step in, as it did after Genesis suffered losses due to its exposure to Three Arrows Capital (3AC).
Genesis further indicated that it has no ongoing affiliation with FTX or its sister company Alameda Research, which FTX CEO Sam Bankman-Fried has stated is "also winding down trading."
The denial of an ongoing association follows other businesses in the crypto industry attempting to separate themselves from the FTX disaster, with Tether, Circle, Kraken, and Coinbase all stating that they are not connected to either of the struggling organizations.
Meanwhile, after the initial solvency worries were raised, market maker Wintermute cut its exposure to FTX.
Wintermute tweeted that it has remaining funds on FTX and noted that "while this is not ideal, the amount is within our risk tolerances and does not have a significant impact on our overall financial position."
Although the trading company has been a frequent user of the FTX exchange, Amber Group claimed it has no exposure to Alameda, a sister company of FTX, or the FTT token.
According to a letter from the venture capital firm Multicoin Capital seen by The Block, 10% of the entire funds under management of its Master Fund are currently stalled as pending withdrawals on FTX.
Before the withdrawal freeze took effect on Tuesday, Multicoin was able to transfer around 24% of its FTX-held assets. Bitcoin (BTC), Ether (ETH), and USD are some of the assets that are stranded.
On Twitter, CoinShares, a European digital asset investing and trading firm, declared "limited exposure" to FTX and no exposure to Alameda Research. CoinShares has "significantly reduced" its FTX exposure to 26.6 million British pounds ($31 million) in proprietary assets in the last week, while the company's overall financial health remains good.
During the FTX meltdown, Genesis stated that it had "printed record volumes," after declaring on Nov. 9 that investors come to them to manage their risks when market circumstances are volatile.
Its active loans, however, have plunged 74.8% during the last crypto winter, with its latest Q3 report revealing that active loans outstanding were $2.8 billion, down from $11.1 billion at the same time last year.