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 attainable meltdown of Genesis International Capital poses an even bigger threat within the digital asset markets than the chapter of the FTX change.
“In my seat, I truly suppose Genesis is an even bigger problem when it comes to the capital markets of crypto than even FTX.
Genesis was the most important 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 as a way to do market making, you’re going to see liquidity get sapped out of the markets, spreads widen, no buyers wish to are available in and you’ve got a vicious cycle.
So, Genesis is an important a part of the crypto capital markets.”
Earlier this month studies emerged that Genesis had halted withdrawals as a consequence 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.