Genesis, Gemini Influenced by the FTX Contagion
There are mounting indications that the bankruptcy of FTX will spread contagion.

On Wednesday, Genesis Global Capital, the lending division of the cryptocurrency company Genesis, made the announcement that it has temporarily halted redemptions as well as the origination of new loans. The company cited "severe market dislocation" and a lack of industry trust caused by the bankruptcy of top cryptocurrency exchange FTX the previous week as the reason for their decision.

The official Twitter account for Genesis, which revealed the news together with its parent business, Digital Currency Group, stated, "We recognize how tough this last week has been due to the impact of the FTX announcement." "At Genesis, we are completely committed to putting our clients' needs first and doing all in our power to assist them in navigating this challenging market situation."

Genesis has maintained that other aspects of the company are still in good condition, despite the fact that the future of the company's lending operation has been called into question. Both Genesis' spot trading and derivatives trading facilities are, as of this moment, running without any significant interruptions. Additionally, the company underlined that Genesis Global Trading was independently capitalized and run. This means that the company's other divisions and the Digital Currency Group would not be impacted in the event of Genesis Global Trading going bankrupt.

Gemini, a cryptocurrency exchange, has discontinued its Earn program as a direct result of Genesis freezing its lending operations. Customers of Gemini who have assets deposited into the Earn program will no longer have the ability to retrieve their monies back within five business days, as required by the service-level agreement for the Earn program. Customers have the ability to earn rates of up to 8% per annum by lending their crypto assets to Genesis through the Gemini Earn platform.

"We are collaborating with the Genesis team to assist clients in redeeming their Earn program funds in the shortest amount of time feasible. Tweeted Tuesday by the official Gemini account on Twitter was the following: "We will share additional details in the coming days."

Gemini, much like Genesis, has reassured its clients that the disruption will not impact other aspects of the company's operations. Gemini operates as both a full-reserve exchange and a custodian. According to the information provided, "all customer money held on the Gemini exchange are held 1:1 and are accessible for withdrawal at any time."

The Crypto Market's Reaction to Concerns About Contagion
Bitcoin, along with the rest of the cryptocurrency market, has resumed its downward trend as a direct reaction to today's worries of contagion. The leading cryptocurrency has dropped by more than 4% from its all-time high of over $17,100 reached yesterday. The value of other assets has been significantly reduced. The second-largest cryptocurrency asset in terms of market capitalization, Ethereum, has experienced a decline of more than 6% and is currently testing the support level located at $1,200. Both assets are rapidly approaching their yearly lows, which were established just last week when the crypto market was rocked by the collapse of FTX.

The most recent companies to be affected by the FTX virus are Genesis and Gemini, but it's highly likely that they won't be the last. The FTX empire was a business that extended across multiple industries and consisted of a number of distinct but interconnected companies. As was the case earlier this year with the failure of the Terra ecosystem and the cryptocurrency hedge fund Three Arrows Capital, it will probably be some time before all parties that were affected are brought into the light.

Disclosure: At the time this article was written, the author held Ethereum (ETH), Bitcoin (BTC), and a number of other cryptocurrencies.

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