Crypto lender Genesis subject of probe by regulators - Barron's
Reuters
Published Nov 25, 2022 04:36PM ET
(Reuters) - State securities regulators are investigating Genesis Global Capital as part of a wide-ranging inquiry into the interconnectedness of crypto firms, Barron's reported on Friday citing a comment from the Alabama Securities Commission Director.
While it does not directly serve individual investors, Genesis backs products offered by crypto companies such as Circle Internet Financial, the principal operator of one of the largest stablecoins, USD Coin, and by Gemini. Those products pay yield to customers who deposit certain cryptocurrencies on the platforms.
The inquiry will look into Genesis's connection to such retail investors, and whether it or other industry participants might have violated securities laws, the report added.
Genesis and Alabama Securities Commission did not immediately respond to Reuters' requests for comment on the report.
In the aftermath of the collapse of crypto exchange FTX, Genesis suspended customer redemptions in a spillover effect citing "abnormal withdrawal requests" that exceeded its liquidity.
Earlier this week, the New York Times reported Genesis hired investment bank Moelis (NYSE:MC) & Company to serve as the firm's restructuring advisor as it explored options including a potential bankruptcy.
Several crypto firms have been plagued by contagion concern from the fallout of the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.
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Written By: Reuters
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