Prominent cryptocurrency firm Genesis has suspended customer withdrawals at its lending arm.
Derar Islim, interim chief executive officer, says that withdrawal requests currently exceed the available liquidity.
Genesis says that its trading and custody businesses are not affected.
Bitcoin plunged to an intraday low of $16,505 on the Bitstamp exchange.
It seems that yet another firm has been hit hard by the collapse of the FTX crypto empire.
Genesis says that the decision was made in response to "extreme market dislocation."
Earlier this month, Genesis received a $140 million infusion from leading cryptocurrency venture capital company Digital Currency Group. The company is part of DCG's portfolio, alongside Grayscale, Foundry and others.
According to Genesis's website, the crypto brokerage's lending arm had $2.8 billion in active loans at the end of Q3.
The cryptocurrency industry is in full-blown crisis mode due to the FTX-related contagion. As reported by U.Today, crypto lending firm BlockFi appears to be on the cusp of bankruptcy due to its heavy exposure to the failed cryptocurrency exchange.
Following Genesis's announcement, Gemini Earn also said that it was pausing withdrawals.
Gemini partnered with Genesis to offer yield on customer deposits back in February 2021.
Tomiwabold Olajide
Godfrey Benjamin
Arman Shirinyan
