Representations of virtual cryptocurrencies are placed on U.S. dollar banknotes in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
and blocked customers from taking out money because of what it called "unprecedented market turmoil" that rippled through the market after FTX filed for bankruptcy last week.The contagion concerns stem from Genesis' prominence in crypto, its links to troubled firms and broader reach into the financial world.
While Genesis declined to comment on the Journal report, a spokesperson said it had "massively reduced" its exposure to Alameda after the collapse of Three Arrows. Genesis also said it had "no material exposure" to FTX's native digital token or those of other crypto exchanges, and had hedged its positions on holdings linked to FTX.
Crypto lenders, who acted as the de facto banks of the crypto world, boomed during the pandemic. But unlike traditional banks, they are not required to hold capital cushions. Earlier this year, a shortfall of collateral forced some lenders - and their customers - to shoulder large losses.
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