Following the collapse of cryptocurrency exchange FTX, several US regulators have opened investigations into Sam Bankman-Fried’s company and other centralized operators as negative contagion ripples through the market.

Now, the Alabama Securities Commission and other states are investigating Genesis Global Capital, according to Barron’s.

Alabama Securities and Exchange Commission Director Joseph Borg told Barron’s that “several other states” are part of the investigation, but did not name which states those are.

According to Barron’s, the Genesis investigation is part of a broader investigation into how connected many cryptocurrency companies are and whether these companies have violated state securities laws.

Borg cited “the interlocking interdependencies and connections in the crypto space” as a point of concern due to the risk of contagion when a player as large as FTX fails. At press time, Genesis has not commented on the Barron’s report.

the contagion

On Nov. 16, Genesis suspended customer redemptions and new operations at its lending business, citing “abnormal withdrawal requests” following the FTX collapse. The company reportedly sought an emergency investment of $1 billion before halting the withdrawals.

This Genesis issue meant that cryptocurrency exchange Gemini had to warn customers about delays in withdrawing from their Earn accounts, which they operate through a partnership with Genesis.

On November 21, Genesis warned investors that it would face the possibility of bankruptcy if it was unable to raise capital.

“We have no plans to declare bankruptcy anytime soon,” a Genesis spokesperson told the decrypt🇧🇷 “Our aim is to resolve the current situation consensually, without the need for any declaration of bankruptcy. Genesis continues to have constructive conversations with creditors.”

In a Tuesday letter to investors, Barry Silbert, CEO of Digital Currency Group, parent company of Genesis, tried to sound upbeat, saying that despite owing $575 million to Genesis, DCG has a strong future.

“We’ve weathered past crypto winters, and while this one may feel more severe, we’ll collectively come out of it stronger,” wrote Silbert.

In addition to the new investigations, Genesis has yet to recover from the collapse of Three Arrows Capital (3AC) earlier this year, which left the company $2.3 billion in debt.

* Translated and edited with permission from🇧🇷

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