The president of the tech agency behind Avalanche (AVAX) says that the implosion of a significant digital asset lender would have extra extreme penalties for the crypto markets than the current FTX fiasco.
In a brand new Bloomberg interview, Ava Labs president John Wu says that the attainable meltdown of Genesis International Capital poses a much bigger threat within the digital asset markets than the chapter of the FTX alternate.
“In my seat, I truly assume Genesis is a much bigger problem by way of the capital markets of crypto than even FTX.
Genesis was the biggest lender on the market. They’ve executed unsecure in addition to collateralized lending. There’s actually nobody else doing that lending. With out them within the markets, all of the folks within the worth chain, all the businesses like market makers who must borrow so as to do market making, you’re going to see liquidity get sapped out of the markets, spreads widen, no buyers wish to are available and you’ve got a vicious cycle.
So, Genesis is a vital a part of the crypto capital markets.”
Earlier this month stories emerged that Genesis had halted withdrawals on account of liquidity challenges caused by the downfall of FTX and crypto hedge fund Three Arrows Capital (3AC).
Final week, one other report revealed that Genesis had requested an emergency mortgage of $1 billion from buyers previous to halting withdrawals.
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