US regulators are looking into whether or not Genesis and other crypto firms violated securities laws.
A number of US regulators launch an investigation on Genesis Global Capital and other crypto firms after the collapse of crypto exchange FTX.
According to the news report shared by the news portal Barron’s on November 25th, with the investigation, securities regulators aim to determine whether Genesis violated securities laws.
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The news about the investigation was confirmed by the director of the Alabama Securities Commission, Joseph Borg, who claims that the investigation was launched by his state and several other states in the United States of America.
Joseph Borg added that the investigation also aims to determine whether Genesis and other crypto firms persuaded customers to invest in securities without having appropriate registration.
At the time of writing, it is still unclear what other crypto companies are under the investigation or which states have joined the probe.
The investigation by US regulators is just another part of the Genesis story. It is worth noting that after the collapse of the crypto exchange FTX, Genesis announced that around $175 million worth of funds were stuck in FTX.
Therefore, it was no surprise when on November 16th, Genesis halted its withdrawals due to “unprecedented market turmoil” caused by the bankruptcy of crypto exchange FTX. The company added that the company has experienced “abnormal withdrawal requests which have exceeded <Genesis> current liquidity.”
After Genesis suspended withdrawals, the crypto community started buzzing, claiming that Genesis was preparing for Chapter 11 bankruptcy. However, Genesis spokesperson denied the rumors, stating:
We have no plans to file bankruptcy imminently. Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.
Moreover, last week, the news started surfacing that Genesis has $2.8 billion in outstanding loans on its balance sheets.