One Crypto Firm Poses Bigger Risk to Markets Than FTX, According to Ava Labs President Says

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 doable meltdown of Genesis World Capital poses an even bigger threat within the digital asset markets than the chapter of the FTX alternate.

“In my seat, I really assume Genesis is an even bigger situation when it comes to the capital markets of crypto than even FTX.

Genesis was the most important lender on the market. They’ve performed 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 must borrow with the intention 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 stories emerged that Genesis had halted withdrawals on account 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.

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Featured Picture: Shutterstock/Philipp Tur/Natalia Siiatovskaia