Amid the FTX crisis, Genesis Trading said that its management is working to effectively handle the company’s lending book and credit exposure.
Genesis Trading, the crypto trading and lending platform, reported a $7 million loss across all counterparties including the recently troubled Alameda Research. The liquidity crunch on FTX has a spillover effect across the entire crypto market which resulted in massive volatility in the last two days.
Since FTX is finding it difficult to get any buyers and investors, market players have been anticipating that the FTX contagion could spread to other crypto firms as well. This could be a case of serious concern for the entire crypto market.
Genesis Trading said that Tuesday’s losses after it hedged and sold collateral in anticipation of market volatility. Furthermore, the crypto trading platform has reiterated that they have no material exposure to FTX’s native token or “any other tokens issued by centralized exchanges”.
Also, Genesis Trading said that a staggering 95% of the collateral on its lending books comprises stablecoins, Bitcoin, Ether, and USD. Although Genesis accepted doing trading business with FTX, the relationship has not extended further to lending. In their Twitter message, the company wrote:
“Our business ops, including lending and trading across spot and derivatives, continue to run normally and our balance sheet remains strong. Yesterday was a top 5 volume day for our derivatives business as clients turn to us during volatile market conditions to manage their risk.”
Maintaining and Managing the Lending Book
Amid the recent crisis, Genesis Trading is taking every effort in managing its lending book. The company said that they have no material net credit exposure. Furthermore, Genesis also doesn’t have any exposure to any tokens issued by centralized exchanges.
They said that they have been effectively managing the needs of their clients across all their products globally. Genesis added:
Our experienced trading and risk management teams are constantly assessing credit, volatility, and liquidity in the market to optimize our positioning and operations. Genesis is committed to being a leading digital assets market maker and continuing to drive the industry forward.
The FTX crisis has a major impact on the entire crypto market. Earlier today, the Bitcoin price crashed all the way under $16,000 hitting a two-year low. The crypto market has lost nearly $200 billion in less than a week’s time.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
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