Grayscale And Binance Assure Users of Funds Safety.
Grayscale has assured clients of the safety and security of their funds amid the panic triggered by the FTX implosion and redemption suspension of a subsidiary of one of its affiliate firms, Genesis Global Capital.
Grayscale Investments, a prominent digital asset investing services firm, has publicly come up to reassure its clients of the security and safety of their funds amid the commotion and panic provoked by the recent FTX collapse. Grayscale’s assurance became especially necessary following a decision from its affiliate Genesis to suspend redemptions on its lending arm temporarily.
“In the wake of recent events, our investors should know that the safety and security of the holdings underlying Grayscale digital asset products are unaffected,” Grayscale remarked in a tweet Wednesday.
Genesis Global Capital recently announced a temporary suspension of redemptions and originations of new loans amid the contagion precipitated into the space by the FTX debacle, triggering panic amongst investors. Grayscale pointed out that neither Genesis Global Capital nor Genesis Global Trading serves as a counterparty for any of Grayscale product offerings. The recent temporary suspension of redemptions does not affect clients’ funds at Grayscale.
“Grayscale products continue to operate business as usual, and recent events have had no impact on product operations,” Grayscale added in a separate tweet within the thread to assuage investor concerns and assure the public of business as usual.
The firm further noted that all the assets under management (AuM) in its Grayscale Bitcoin Trust (GBTC) and other products, including but not limited to the Grayscale Smart Contract Platform Ex-Ethereum Fund and the Grayscale Ethereum Trust, remain unaffected, as the assets under these funds are held in cold storage facilities powered by Coinbase. The GBTC, in particular, has $10.7B in AuM, making it the firm’s largest fund in mainstream crypto.
Additionally, Grayscale confirmed that it does not engage in any form of lending, borrowing, or rehypothecation of the assets within its products, and its custodian Coinbase is also prohibited from engaging in such activities. It further highlighted that all its publicly-quoted products remain operational.
These words of reassurance come amidst the developing situation surrounding Genesis Global Capital. The lending entity noted abnormal withdrawal requests after the FTX implosion. The withdrawal requests exceeded its current liquidity, and it had to suspend redemptions and originations of new loans. The development was disclosed by its CEO, Derar Islim.
The firm noted that steps were being taken to remedy the situation, including hiring appropriate advisers and raising funds to meet its obligations to the clients. Islim noted that the public would receive updates on the issue next week. The issue only affects the platform’s lending business, as other businesses remain functional.
Binance Operations Remain Normal
Binance CEO Zhao also confirmed that “Binance does not rely on Genesis or any other 3rd-party for our Earn products.”
Binance does not rely on Genesis or any other 3rd-party for our Earn products. For on-chain staking, Binance uses our own nodes where possible.
Stay #SAFU. ?
— CZ ? Binance (@cz_binance) November 16, 2022
Gemini Stopping Withdrawals
Meanwhile, being one of Genesis Global Capital’s biggest lenders, crypto exchange Gemini has to stop withdrawals and noted that it is working with Genesis to remedy the situation.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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