The President of Ava Labs Claims That Another Crypto Firm Presents a Greater Threat to the Markets Than FTX
The head of the technology company behind Avalanche (AVAX) asserts that the collapse of a big digital asset lender would have a greater impact on the cryptocurrency markets than the recent FTX disaster.
According to ava labs president john Wu, “From my vantage point, I believe Genesis poses a greater threat to the crypto capital markets than even FTX.
Genesis was the most prominent lender available. They have engaged in both unsecured and collateralized lending. Without them in the markets, all the individuals in the value chain, and all the firms such as market makers that need to borrow in order to construct markets, liquidity will be sucked out of the markets, spreads will widen, no investors will want to enter, and a vicious cycle will ensue. Therefore, Genesis is a vital component of the crypto capital markets.”
At the beginning of this month, it was reported that cryptocurrency exchange Genesis had temporarily blocked withdrawals owing to difficulties with liquidity brought about by the collapse of the cryptocurrency hedge fund Three Arrows Capital (3AC).
The previous week, another source stated that Genesis demanded a $1 billion emergency loan from investors prior to suspending withdrawals.
Also Read: Belgian Regulators Concluded That Crypto Like Bitcoin And Ether Do Not Qualify As Securities
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