FirstFT: ‘Unprecedented’ crypto turmoil

Genesis Trading has halted withdrawals at its lending unit as the crypto financial services group blamed the “unprecedented market turmoil” sparked by the collapse of Sam Bankman-Fried’s FTX.

Genesis, which plays a key role in digital asset fixed income markets, said its decision to suspend redemptions and new loan originations followed “abnormal withdrawal requests which have exceeded our current liquidity”. The troubles at Genesis are the latest sign that the failure of Bankman-Fried’s FTX crypto exchange and Alameda Research, his trading firm, is sending shockwaves across the crypto industry.

On Wednesday, the US House of Representatives financial services committee announced a hearing into the collapse of FTX and its impact on the crypto market. New York-based Genesis allows clients to lend out their coins in exchange for yields of as much as 10 per cent, while also providing similar services for groups including exchanges operator Gemini, which is run by twins Tyler and Cameron Winklevoss. Genesis also lends digital coins to institutions such as hedge funds and family offices.

• Listen in: On this episode of our Behind the Money podcast, asset management correspondent Josh Oliver explains what caused FTX’s collapse, and markets editor Katie Martin tells us what it says about the future of crypto.

Five more stories in the news

1. Ukraine and allies at odds over missile that exploded in Poland Ukraine and its western allies are in disagreement over who launched a missile that exploded in Poland, with Nato, Warsaw and the US saying the weapon was likely fired by Kyiv’s air defence forces during a Russian attack. President Volodymyr Zelenskyy said he had “no doubt” the missile that killed two people was not Ukrainian.

2. China is co-opting UK assets, warns MI5 chief The Chinese are playing a “long game” seeking to co-opt and influence not just MPs but people much earlier in their careers in public life, in what the head of Britain’s domestic security agency said was part of a “game-changing strategic challenge” he highlighted during his annual threat assessment.

3. Schwarzman says he won’t support Trump’s 2024 bid Blackstone founder Stephen Schwarzman has said he will not support Donald Trump’s bid to reclaim the US presidency, marking a significant defection by a top Republican party donor who defended him in 2020 as the then-president baselessly claimed that the election had been stolen.

4. Tencent to ‘distribute’ $22bn Meituan stake The Chinese tech group yesterday said it would “distribute” the majority of its $22bn stake in Meituan, a food delivery company, in dividend, as it works to reduce its holdings in the country’s technology sector. Tencent’s quarterly revenue fell for a second quarter, underscoring the toll of Beijing’s bruising regulatory crackdown on the country’s internet sector.

5. UK inflation accelerates to 11.1% UK inflation hit its highest level for 41 years in October. The Office for National Statistics said the rise from 10.1 per cent in September was on the back of rising energy and food prices. The surprisingly high rise presents a difficult backdrop for chancellor Jeremy Hunt’s upcoming Autumn Statement.

The day ahead

Alibaba earnings Jack Ma’s ecommerce group will release third-quarter results today, days after it said that its annual Singles Day performance was “in line” with last year, implying an end to years of rapid growth.

Japan inflation figures Consumer price index data for October is set to be released today. Use our personal inflation calculator to determine how price rises are affecting you.

Autumn Statement Chancellor Jeremy Hunt is set to unveil his financial statement, which he has repeatedly said will be “eye-wateringly” difficult as he attempts to plug a “fiscal hole” in the public finances.

Join the FT at our Commodities Asia Summit in Singapore on November 23 for discussion from industry leaders including Singapore’s Minister of Trade and Industry. You can also follow along online. Register here for your in person or digital pass.

What else we’re reading and listening to

Frosty UK-China relations are here to stay In many ways, the cancelled meeting between Rishi Sunak and Xi Jinping sum up Sunak’s challenge in China policy: he wants to take the UK back to an earlier, less confrontational era of UK-China relations. But events and forces outside his control mean that he is going to struggle, writes Stephen Bush in his Inside Politics newsletter.

How not to fire people A firing spree is under way at nearly 800 technology companies, with Amazon and Facebook owner Meta leading the pack. Brooke Masters argues that the poor handling of these job cuts could shape the sector’s culture for years to come.

Central banks are right to act decisively It is the duty of the state to ensure that its money has a predictable value. Central banks are entrusted with this task. Recently, they have been failing badly, writes Martin Wolf, and it is a necessity and an obligation to rectify this failure.

How the battlefield will shift after Russia’s Kherson retreat After Russia’s forced retreat from the southern Ukrainian city of Kherson last week, both sides are calculating their next moves. Russia is likely to renew its focus on the east following its pullback in the south, analysts say. The shift would echo the Kremlin’s strategy after its forces retreated from Kyiv in the spring.

China intervention offers glimmer of hope to property sector Although it falls well short of a bailout, the government’s new package — in an environment where the economy has also struggled under zero-Covid restrictions — has had an immediate impact on sentiment. “I think this is a turning point for the market,” said Michelle Lam, greater China economist at Société Générale.

Books

Rupert Murdoch has used his media empire to acquire unrivalled political influence on three continents, so the question of who will inherit that power — and what they might do with it — still matters. In that regard Paddy Manning’s unauthorised biography The Successor is as well timed as it is cannily titled, says US business editor Andrew Edgecliffe-Johnson.