SINGAPORE - A day after digital currency broker Genesis Trading and platform Gemini Trust Co suspended withdrawals, Singapore’s regulator says it will factor in these developments in their local entities’ licence applications.
Genesis Asia Pacific, a subsidiary of Genesis Group, was granted an in-principle approval to offer digital payment services under the Payment Services Act 2019, while Gemini Trust Company now has an exemption from licensing, the Monetary Authority of Singapore (MAS) said on Thursday.
In an e-mail reply to queries, MAS said both entities are not licensed, and it will take into account “all material developments” when assessing a licence application.
It added that it has consistently warned the public and signalled concerns regarding the volatility in the values of cryptocurrencies. “The recent developments underscore this risk.”
In a series of Twitter posts on Wednesday night, Genesis Trading said it would suspend withdrawals on its lending business.
The default of bankrupt hedge fund Three Arrows Capital had negatively impacted the liquidity and duration profiles of its lending entity, Genesis Global Capital.
The fall of FTX added to the liquidity crunch as it triggered “abnormal withdrawal requests”, said the firm, whose Singapore arm is Genesis Asia Pacific.
By association, Gemini also suspended withdrawals from its Earn programme after partner Genesis Global Capital did the same. This is a scheme where investors may choose to lend crypto to certain institutional borrowers to earn interest.