The most recent company to declare exposure to FTX is Genesis Trading and it may seek assistance from its parent company.
Genesis Trading, the market maker and lending arm of Digital Currency Group, disclosed that its derivatives business has about $175 million in funds stashed away in an FTX trading account in what it describes as an effort to be transparent. The information was released by Genesis in a thread of tweets on November 10; the company made it clear that the locked funds “would not impact our market-making activities.”
Additionally, Genesis declared that they were in no way connected to FTX or its sister business Alameda Research, which FTX CEO Sam Bankman-Fried has said is “also winding down trading.”
Other companies in the cryptocurrency sector have been trying to distance themselves from the fallout from FTX, and Tether, Circle, Kraken, and Coinbase have all stated that they are not exposed to the troubled firms, prompting the denial of an ongoing relationship.
It’s unclear whether Genesis’ parent company Digital Currency Group will be required to intervene, as it did after Genesis suffered from its exposure to Three Arrows Capital, despite Genesis’ claim in the Nov. 10 thread that its capital and positions in FTX would not prevent the “full functioning of our trading franchise”.
After claiming on Nov. 9 that investors turn to them when market conditions are erratic to manage their risks, Genesis asserted that it has “printed record volumes” amid the FTX fallout.
However, during the most recent crypto winter, its active loans fell by 74.8%. According to its most recent Q3 report, the total amount of active loans outstanding was $2.8 billion as opposed to $11.1 billion at the same time last year.