March 29, 2024

John Woo: Bankruptcy of Genesis could lead to a liquidity drain from the crypto market

Article Reading Time:
1 min.

John Woo: Bankruptcy of Genesis could lead to a liquidity drain from the crypto market

The head of the technology company Ava Labs noted the importance of the role of crypto lender Genesis Global Capital in attracting new investors to the digital asset market.

General Director of the issuing companycryptocurrency Avalanche (AVAX) John Wu said that the collapse of Genesis Global Capital poses a greater risk to the digital asset market than the bankruptcy of the FTX exchange:

"Genesis was the largest creditor, heengaged only in issuing loans. Now it faces a liquidity crisis and may exit the market. Without it, the value chain of all crypto companies will be disrupted. Market makers, who need to borrow to support the market, will be unable to raise capital. You will see how quickly liquidity will leave the markets, spreads will widen, investors will stop investing in the crypto industry and the circle will close. Genesis is a very important part of the cryptocurrency markets."

Genesis's situation is getting worse every day.According to media reports, the Genesis Global Capital service recently became the subject of an investigation by American regulators in connection with the suspension of the withdrawal of funds and the company’s liquidity crisis.