Crypto Crisis Causes Big-Time Firms To Crash

The contagion that everyone in the crypto world feared is coming to fruition, and it may be just the beginning, CNN Business reported.

Photo Insert: The FTX fiasco may just be the beginning.

On Wednesday (Thursday, Nov. 17, in Manila), the lending arm of crypto brokerage Genesis suspended redemptions and new loan originations after an "abnormal" number of withdrawal requests that exceeded its current liquidity, citing market turmoil from the failure of FTX.

Genesis said it was working with advisers "to explore all possible options," adding that it would release a plan for the lending business next week.

"In the crypto world, the minute you see a company or firm announce 'we're temporarily halting withdrawals' — yikes," said Daniel Roberts, editor-in-chief of Decrypt Media, a crypto-focused news outlet.

"You put them on death watch." Another big player in the crypto space, BlockFi, halted withdrawals last week as FTX came unglued.

And then The Wall Street Journal reported that the company was preparing for a potential bankruptcy filing. All of that is just piling onto the mountain of problems for FTX's founder and former CEO, Sam Bankman-Fried.

On Wednesday an FTX investor sued Bankman-Fried as well as several celebrities who have endorsed the platform, including Tom Brady, Gisele Bundchen and Steph Curry.

"The deceptive FTX platform maintained by the FTX entities was truly a house of cards," the proposed class-action lawsuit states.

"FTX were geniuses at public relations and marketing, and knew that ... [it] could only be successful with the help and promotion of the most famous, respected, and beloved celebrities and influencers in the world," wrote one of the lawyers, Adam Moskowitz, in an email.

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