By
Bhushan Akolkar
April 26th, 2024
Genesis Block may have been winding down its services all year long, but the recent FTX crash has now caused it to stop trading.
Hong Kong’s leading cryptocurrency exchange Genesis Block has reportedly stopped trading. According to a Reuters report on Friday, the decision reflects a broader effect of the FTX collapse and liquidity issues that continues to roll the crypto industry.
Genesis Block Aims to Regain Some of Its Liquidity
For Genesis Block, the FTX incident was more like the straw that broke the camel’s back. Especially since it has had to endure a year of a downturn, just like many other crypto firms. But apparently, the FTX collapse is proving to be too much for the Genesis Block. According to an email it reportedly sent to its customers, it would be closing down its over-the-counter (OTC) trading portal on December 10.
Meanwhile, about the decision to halt trading, the firm’s CEO Wincent Hung claims that the move is only precautionary. He said in part:
“We have ceased trading, as we don’t know which counterparties would fail next, so we would rather close out all our positions to regain some of our liquidity.”
For now, however, the company’s website continues running, even as the helpdesk remains available for customers interested in OTC trading. That is despite the email suggesting to customers that they should withdraw whatever funds they have left. It should also be noted that the company does not accept new customers anymore.
According to sources with insider knowledge of the operations of Genesis Block, the firm began shutting down its services earlier in the year. In fact, it had reportedly severed its links with FTX before the latter’s eventual collapse.
Growing List of Affected Crypto Firms
It is worth mentioning that there is a growing list of firms that were directly or indirectly exposed to FTX before its crash. Similarly, as Genesis Block, institutional crypto services provider Genesis was also affected by the FTX crash. The company has about $175 million held up in the now-defunct exchange.
Huobi Global is another top crypto firm that has lost funds to FTX. According to the company, it has around $18.1 million worth of deposits held up there, with about $13.2 million belonging to clients.
From all indications, the full extent of the FTX fallout is not yet known and will continue to unfold as time goes by.