The president of the tech agency behind Avalanche (AVAX) says that the implosion of a serious 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 potential meltdown of Genesis International Capital poses a much bigger danger within the digital asset markets than the chapter of the FTX change.
“In my seat, I truly assume Genesis is a much bigger problem when it comes to the capital markets of crypto than even FTX.
Genesis was the biggest lender on the market. They’ve finished 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 have to borrow to be able to do market making, you’re going to see liquidity get sapped out of the markets, spreads widen, no traders 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 experiences emerged that Genesis had halted withdrawals attributable to 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 traders previous to halting withdrawals.
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