1 min read
Listen to this article:
Binance reportedly rejected an investment offer from problematic crypto loan company Genesis due to potential conflicts of interest.
According to a recent article in the Wall Street Journal, cryptocurrency exchange Binance will not invest in Genesis. Binance declined the chance due to a potential conflict of interest with Genesis' business strategy. This comes after Genesis stopped originating new loans and redeeming existing ones on its platform.
Genesis stated at the time: "This decision was made in response to the severe market disruption and decline in industry trust brought on by the FTX implosion. Genesis' trading or custody activities are unaffected, only the loan division is affected. It's important to note that this temporary action has no effect on DCG's or our other fully-owned companies' business operations.
Genesis promised its customers that, in addition to its custody services, it will continue to provide over-the-counter trading for spot and derivatives trading.
Prior to limiting withdrawals last week to avoid a liquidity crisis, Genesis attempted to secure a $1 billion loan from investors. The Crypto lender had earlier approached Apollo Global Management, a private equity firm, for cash support.
Gemini, another significant cryptocurrency exchange, was impacted by Genesis' announcement to halt redemptions. Gemini stated at the time that its Earn program would not be able to fulfill customer redemptions within the agreed-upon five business-day timeframes.
Genesis Global, a subsidiary of Barry Silbert's Digital Currency Group (DCG), introduced the first over-the-counter Bitcoin trading desk in the market in 2013. Since then, it has grown to be one of the industry's major participants.
Nevertheless, despite its notoriety, Genesis was the most recent casualty of the cryptocurrency epidemic brought on by Sam Bankman-FTX Fried's company failure earlier this month.
FTX's native token FTT was reportedly used as collateral for loans Genesis had outstanding to Alameda Research, a trading company connected to FTX.