After showing interest in buying troubled liquidity from FTX, but then withdrew his offer within 24 hours, Binance big boss Changpeng ‘CZ’ Zhao is reportedly interested in acquiring Genesis loan assets .
Following the FTX implosion, the Genesis cryptocurrency platform temporarily stopped withdrawals in its lending operation.
FTX, founded by Sam Bankman-Fried and once the third-largest cryptocurrency exchange by volume, filed for bankruptcy last week.
Genesis informed investors on a call on Wednesday that its lending arm was unable to meet all withdrawal requests due to the unusual turbulence caused by the rapid fall of FTX.
Binance Big Boss requests loan information
According to Genesis, “abnormal withdrawal requests” have depleted its “current liquidity”.
Reports indicate that “CZ”, the CEO of Binance, has communicated for more information on the balance sheet of Genesis as he reviews a possible offer for crypto platform lending assets.
In the 2022 third quarter report, Genesis disclosed active loans worth nearly $3 billion.
Digital Currency Group (DCG), the venture capital firm that owns Genesis, Grayscale Investments and cryptocurrency news site CoinDesk, says Genesis’s decision to freeze withdrawals has “no impact on business operations of DCG” and its other wholly owned companies. companies.”
Binance CEO Changpeng 'CZ' Zhao. Image: Wall Street Journal
Another major player also interested
As this developed, B2C2 – the biggest market maker in the industry – also offered to buy loans from Genesis. B2C2 chief and founder Max Boonen originally tweeted about the offer as a measure to “alleviate current liquidity issues”.
Several funds, service providers and lending platforms in the crypto sector have exposure to the beleaguered SBF crypto exchange, and when investors withdrew their funds from exchanges and stablecoins, these entities began to experience liquidity problems.
Even the biggest prime brokers have been hit by the drying up of liquidity, including the Genesis Trading lending platform.
The fast fall of FTX caused many people to lose faith in the excitement around cryptocurrencies.
According to Dow Jones market data, the price of Bitcoin, the world’s largest cryptocurrency, fell more than 7% to a low of $15,708 on the news of FTX’s bankruptcy filing.
Genesis loans should be peanuts for Binance and CZ
Meanwhile, in its latest earnings report, Genesis revealed an 80% reduction in active loans over the past three months, down from around $5 billion to just $2.8 billion.
After the collapse of Three Arrows Capital – a Singapore-based cryptocurrency hedge fund – Genesis made around 20% of its staff jobless and replaced former CEO Michael Moro with COO Derar Islim.
According to Forbes, Binance has facilitated over $9.5 trillion transactions last year, accounting for more than two-thirds of all transaction volume processed by centralized cryptocurrency exchanges.
If all goes according to plan – due diligence process and background check included – taking on Genesis loans shouldn’t be a problem for CZ.
Crypto total market cap at $786 billion on the daily chart | Featured image from Money.com, Chart: TradingView.com