The collapse of platforms such as FTX in November and Terra, Celsius before; has caused regulators to increase their oversight of the cryptocurrency space. Many countries are trying to take regulatory measures to ensure that no more citizens are harmed. Meanwhile, it turned out that securities regulators in the US are investigating some crypto platforms. Here are the details…
Genesis Global and other cryptocurrency firms are under investigation
According to reports dated Nov. 25, crypto lending firm Genesis Global Capital and other crypto firms are under investigation by US securities regulators. Joseph Borg, director of the Alabama Securities Commission; He confirmed that Alabama and several other states are participating in investigations into Genesis’ alleged ties to investors, including whether Genesis and other crypto companies violate securities laws.
It is not yet clear which other companies are being investigated. Borg noted that the investigation focuses on whether Genesis and other crypto companies are influencing investors in crypto-related securities without proper registration. The investigation emerges as another episode of the Genesis crisis. As we reported on Kriptokoin.com, the company previously announced that it had approximately $175 million worth of funds in an FTX trading account.
Bankruptcy rumors denied
On November 16, Genesis announced that it was temporarily suspending withdrawals, citing “unprecedented market turmoil” following FTX’s collapse on November 11. The firm is reportedly having trouble raising money for its lending unit. However, Genesis denied speculation that it would go “near” bankruptcy due to a $1 billion deficit. The company recently used the following statements:
We have no plans to file for bankruptcy anytime soon. Our aim is to resolve the current situation with reconciliation without the need for any bankruptcy filing. Genesis continues to engage in constructive talks with creditors.
Genesis has hired restructuring advisors to explore all possible options, including but not limited to a potential bankruptcy. Moelis & Company, an investment bank, was hired by the firm to explore options. People familiar with the situation stated that no financial decision has been made. He emphasized the existence of the possibility of the company avoiding bankruptcy.
Genesis was the center of attention
Genesis came into the limelight due to concerns of a contagion in the industry as a result of FTX’s bankruptcy along with sister company Grayscale Investments and parent company Digital Currency Group. A tweet by Grayscale on November 18 cited a letter from Coinbase chief financial officer Alesia Haas and Coinbase Custody CEO Aaron Schnarch. He assured investors that all crypto assets underlying Grayscale’s digital asset products are stored under Coinbase’s custody.
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