Reliable sources indicate that the man who founded Binance, the largest cryptocurrency trading platform, is thinking about purchasing Genesis. As he considers a potential offer for the loan assets of Genesis, CZ has inquired about the organization’s incomes and costs situation.
According to Genesis’ Q3 2022 report, there are $2.8 billion in active loans. According to a different source, any attempt of CZ to purchase the loan book of Genesis would likely be rejected by Digital Currency Group, the parent company of Genesis, and a payment in excess of two billion dollars would be required.
Nevertheless, the CZ’s comments on Twitter caused the banking company FTX to shut down last week.
Rumors of the purchase
Due to claims that its balance sheet was absurd and most likely false at the time, FTX had a huge target on its back. Even as it sank, it was still possible to see how closely connected the cryptocurrency industry was, which had shaken the market in May and June.
Three Arrows Capital failed as a result of the algorithmic stablecoin project from Terraform Labs being depegged at the time, which destroyed the last of the rising market period from the prior year.
This time, Zhao may have contaminated the cryptocurrency market all for him to firmly seize the top spot. When requests for comments were made at the time this article was published, Binance had not reacted.
With access to numerous funds, vendors, platforms for loans, and yield platforms, FTX has connections to all cryptocurrency market segments. Exchanges and stablecoins experienced liquidity issues as investors started to withdraw their funds.
Even the largest agents, like Genesis, were impacted by the disappearing liquidity. Digital Currency Group’s fully owned division Genesis declined to comment when contacted.
After enduring shocking losings during the cryptocurrency calamity this spring, Genesis last week claimed direct exposure of $175 million to FTX. As an emergency measure, Genesis received $140 million in equity from DCG.
The consequences to the industry
Given that it is estimated that DCG’s assets under management are worth over $50 billion and that it has invested in numerous early-stage crypto-related startups, any sign of DCG weakness could quickly erode investor confidence in the cryptocurrency industry.
If CZ has the funds to purchase Genesis’ loan book, Binance might be able to maintain its dominance at the top of the crypto pyramid.