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 latest 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 threat within the digital asset markets than the chapter of the FTX alternate.
“In my seat, I truly suppose Genesis is a much bigger challenge by way of the capital markets of crypto than even FTX.
Genesis was the most important lender on the market. They’ve completed 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 with a view to do market making, you’re going to see liquidity get sapped out of the markets, spreads widen, no traders wish to are available in and you’ve got a vicious cycle.
So, Genesis is a vital a part of the crypto capital markets.”
Earlier this month reviews emerged that Genesis had halted withdrawals as a consequence of liquidity challenges led to 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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