• Bitcoin surged 6% to trade at $22,300 while Ether was up 5% to $1,640.
• Crypto lending firm Genesis held $5.1 billion in liabilities in the weeks following its freeze on withdrawals in November.
• Genesis became the latest crypto firm caught up in the immediate fallout of FTX’s implosion, with three of its entities filing for Chapter 11 bankruptcy protection.

Cryptocurrency markets were burning red hot on Wednesday, with Bitcoin surging 6% to trade at $22,300. Ether was also trading up, by 5% to $1,640, while equities closed up.

The surge in activity came as crypto lending firm Genesis held $5.1 billion in liabilities in the weeks following its freeze on withdrawals in November. According to bankruptcy court documents signed by interim CEO Derar Islim, the run on the bank that followed the collapse of sister companies FTX and Alameda caused customers to demand Genesis repay $827 million in loans, leading the firm to freeze withdrawals.

In a first-day motion in the U.S. Bankruptcy Court for the Southern District of New York, Islim provided a breakdown of Genesis’ financial state heading into its restructuring. Genesis became the latest crypto firm caught up in the immediate fallout of FTX’s implosion, with three of its entities – Genesis HoldCo, Genesis Global Capital LLC and Genesis Asia Pacific PTE. LTD – filing for Chapter 11 bankruptcy protection late Thursday.

The filing came after a tumultuous few months for the firm, which froze loan repayments in November, citing liquidity issues. This caused a massive run on the bank, with customers demanding their funds back. The situation was further complicated by Genesis’ sudden closure of its Hong Kong offices in December, followed by its UK office in January.

Genesis had been one of the world’s largest crypto lenders, with an estimated $5 billion in loans outstanding. But the firm has been struggling since the pandemic began, with its customers increasingly becoming unable to repay their loans.

The filing is the latest sign of trouble in the crypto markets. Last month, FTX imploded, sparking a massive sell-off in the crypto markets as investors pulled their funds out of the exchange. The situation was further complicated after the US SEC accused FTX of running a fraudulent securities offering.

The market volatility and turmoil have put a spotlight on the risks associated with investing in crypto and digital assets. The SEC and other regulators have warned investors to be wary of the risks involved and to do their due diligence before investing in any crypto-related products.

The turmoil also serves as a reminder that, while crypto has seen a meteoric rise in recent months, it is still a nascent asset class with many unknowns. Investors should approach crypto with caution, being sure to diversify their portfolios and manage their risk levels accordingly.