UPDATE: Yet again Genesis is admitting to losses on FTX, this time for hundreds of millions. Despite initially falsely denying exposure with fancy technical lawyer speak. Withdraw your loans to them, we dont know how deep this really goes or if they are solvent anymore.

Todays new admission to losses numbering at least in the hundreds of millions: https://twitter.com/genesistrading/status/1590836594382032896

As part of our goal in providing transparency around this week’s market events, the Genesis derivatives business currently has ~$175M in locked funds in our FTX trading account. This does not impact our market-making activities.

Previously: Nov 8, 2022:

With regard to today’s market events, we have managed our lending book and have no material net credit exposure. In addition, Genesis has no exposure to any tokens issued by centralized exchanges. We continue to meet the needs of our clients around the world across all products.

Nov 9, 2022 :

We want to provide an update on where things currently stand with our lending business. In anticipation of the extreme market volatility yesterday, we hedged and sold collateral resulting in a total loss of ~$7M across all counterparties, including Alameda.

Below is an analysis of their tweet information that was posted on reddit on the 9th of November when genesis was still being deceptive about their losses (Link to the Previous Reddit thread: https://old.reddit.com/r/CryptoCurrency/comments/yqq49d/after_denying_exposure_yesterday_today_genesis/):

Genesis has no material exposure to FTT

Translation: We have no direct exposure to FTT but our borrowers who have our money do have exposure to FTT.

Genesis has no lending relationship with FTX

Translation: We have a lending relationship with Alameda which is the same thing as FTX.

Genesis has a trading relationship with FTX, amongst other exchanges. Our exposure to FTX has no impact on our ability to serve our clients.

Translation: We do have trading exposure to FTX (most likely assets on the exchange that cannot be withdrawn due to insolvency) but we arent insolvent yet, unless all customers request their funds back from Genesis. And we still pay workers to come in and answer phones.

our balance sheet remains strong

Translation: On paper we can use tricks to make it look like we arent insolvent yet even though we dont have the actual assets anymore and the borrowers have defaulted.

95% of the collateral in our lending book is comprised of USD/stables, BTC, and ETH

Translation: However we gave many loans with no collateral at all, that were based on the balance sheets of the borrowers, who had FTT and other now worthless coins on their balance sheets which fooled us into giving them loans. Also when we do liquidate all our loans we will Dump ETH and BTC into oblivion because 95% of margin loans are backed by these 2 assets.

These guys are liars and dont want a bank run, which could result in their insolvency. Going from $0 to $7 million in losses, might not sound like a lot, the issue is that they are lying and hiding behind balance sheets backed by worthless stuff, even for example Alamedas balance sheet, which looks “strong” but was backed by FTT tokens. So while Genesis may deny having FTT on their balance sheet, they gave loans to balance sheets of other companies that were completely backed by fake printable tokens and are not saying how many millions, or hundreds of millions in losses they may be facing.

UPDATE: Yet again Genesis is admitting to losses on FTX, this time for hundreds of millions. Despite initially falsely denying exposure with fancy technical lawyer speak. Withdraw your loans to them, we dont know how deep this really goes or if they are solvent anymore.

3 thoughts on “UPDATE: Yet again Genesis is admitting to losses on FTX, this time for hundreds of millions. Despite initially falsely denying exposure with fancy technical lawyer speak. Withdraw your loans to them, we dont know how deep this really goes or if they are solvent anymore.”

  1. We can add FTX Australia and the subsidiary FTX Express to the closed businesses. Sam Bankman-Fried’s FTX Australia enters administration.

    >Revelations have emerged this week that FTX Trading, the global crypto exchange founded and run by Sam Bankman-Fried, may have used more than $US6 billion ($9.09 billion) in customer deposits to fund proprietary trading strategies through another company owned by Mr Bankman-Fried.

    >Headquartered in Sydney, administrators took control of FTX Australia on Friday and began examining the crypto exchange’s books to see whether there are enough assets to pay back local customers of the exchange.

    >Because Australia has no custody rules regarding digital asset exchanges, there was no requirement for FTX Trading to keep customer assets onshore.

    >Mr Bankman-Fried is one of the three directors of FTX Australia. Mr Bankman-Fried did not attend Friday’s board meeting, where the local directors decided to put the local operations in administration.

    The purpose of voluntary administration

    >Voluntary administration is designed to resolve a company’s future: see Table 1. An independent registered liquidator (the voluntary administrator) takes full control of the company. This allows the director or a third-party time to find a way, if possible, to save the company or its business.

    >If it is not possible for the director or a third-party to come up with a plan to save the company or its business, the voluntary administrator aims to administer the company’s affairs to obtain a better return (payment) to creditors than if the company had been immediately wound up (closed down). A mechanism for achieving these aims is a deed of company arrangement (DOCA).

    >A DOCA is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt with. It is agreed to after the company enters voluntary administration.

    Edit formatting.

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