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Genesis bankruptcy warning weighs on crypto markets
Crypto

Genesis bankruptcy warning weighs on crypto markets

22.11.2022
Genesis is warning potential investors that it may need to file for bankruptcy after the sudden collapse of FTX
A day after filing bankruptcy, the deeply troubled cryptocurrency said it had taken action to halt what it said were "unauthorized transactions."
A day after filing bankruptcy, the deeply troubled cryptocurrency said it had taken action to halt what it said were "unauthorized transactions."
Photo credit: AFP

Crypto brokerage Genesis warned of the risk of bankruptcy amid contagion from the rapid demise of Sam Bankman-Fried’s FTX empire.

Tampa Bay Buccaneers quarterback Tom Brady and the Golden State Warriors’ Steph Curry are among the celebrities that a Texas regulator is investigating for potential securities-law violations tied to their promotions of FTX. 

The fall of Bankman-Fried’s businesses, including trading desk Alameda Research, is contributing to reduced liquidity in crypto markets.

Concerns about Genesis and other ailing crypto outfits, such as BlockFi Inc., are unnerving investors. A selloff in Bitcoin paused Tuesday but the token remains around the lowest level since November 2020.

FTX Group Bankruptcy Filing Shows Cash Balance of $1.24 Billion 

An FTX Group bankruptcy filing showed that the fallen cryptocurrency exchange and a number of affiliates had a combined cash balance of $1.24 billion.

The latest tally as of November 20 “identifies substantially higher cash balances than the debtors were in a position to substantiate as of Wednesday, November 16,” according to the filing.

From Genesis to Gemini, How FTX’s Collapse Signals No One Is Safe

Genesis is a counterparty to many in the digital-asset space and is closely watched as a gauge of the industry’s strength. It’s among the crypto lenders that are feeling acute strain after a prolonged rout in virtual-coin prices amid multiple high-profile blowups.

The difficulties at Genesis have also buffeted the billionaire Winklevoss twins Tyler and Cameron, owners of the Gemini crypto exchange.

In response to Genesis suspending withdrawals, Gemini halted redemptions from its Earn product. That left in limbo a program that, according to a person familiar with the matter, has $700 million of customer money tied up in it.

©2022 Bloomberg L.P.