|

Genesis Global Capital to be investigated by US State regulators, fearing FTX's connection

  • Genesis Global Capital recently announced it could potentially file for bankruptcy due to an FTX-induced liquidity crunch.
  • Despite fears of contagion, one of Asia's biggest crypto lenders, Matrixport, is aiming at a $1.5 billion valuation.
  • FTT recovered by 12% in the last four days following the crypto market's improved conditions.

Genesis Global Capital has been in a downfall since the second quarter, which saw the downfall of firms like Three Arrows Capital. The collapse of FTX made the situation far worse for the lending platform. To make things furthermore problematic, the company is now being pursued by regulatory authorities.

Genesis Global Capital falls at regulators' crosshair

Genesis Global Capital (Genesis), the lending arm of the Digital Currency Group (DCG), is reportedly being investigated by US State security regulators. According to the report from Barron's Genesis is part of a multi-state investigation into the interconnectedness of crypto firms. Genesis is also said to be investigated for its connection to retail investors and will also be inquired about other industry participants' involvement in security law violations.

The Alabama Securities Commission Director Joseph Borg stated that the investigation would look into crypto companies' operations. This will reveal whether or not Genesis and other companies prompted crypto investments without making proper registrations.

Earlier this week, as reported by FXStreet, Genesis was looking at a potential bankruptcy filing due to the liquidity crunch that came with FTX's collapse. However, the lending platform confirmed that it would first attempt to raise $1 billion and fix the liquidity crisis.

Crypto company goes for a bite

The current market conditions are as it making it difficult for cryptocurrencies and companies to survive. In the midst of this, a Singapore-based company is looking to raise $100 million in funding to up its valuation to $1.5 billion funding. Matrixport, which is one of Asia's biggest crypto lenders, claims to have commitments worth $50 million from lead investors.

Whether or not the deal will go through is yet to be known since the crypto market is still fearing another contagion. FTX's collapse, which wiped out its native token FTT's value significantly, is still keeping the market subdued. Regardless, cryptocurrencies are recovering, including the likes of FTT itself.

FTT/USDT 1-day chart

FTT/USDT 1-day chart

The cryptocurrency noted a 12.65% increase in its value in the last four days. While this does not make any dent in the 95% drawdown the altcoin registered during November 6's crash, it still is a positive sign. This could even help the broader market in recovering, which is still struggling to breach the $800 billion mark and rise above it.

Author

Aaryamann Shrivastava

Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.

More from Aaryamann Shrivastava
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

Avalanche struggles near $12 as Grayscale files updated form for ETF

Avalanche trades close to $12 by press time on Wednesday, extending the nearly 2% drop from the previous day. Grayscale filed an updated form to convert its Avalanche-focused Trust into an ETF with the US Securities and Exchange Commission.

Bitcoin slips below $87,000 as ETF outflows intensify, whale participation declines

Bitcoin price continues to trade around $86,770 on Wednesday, after failing to break above the $90,000 resistance. US-listed spot ETFs record an outflow of $188.64 million on Tuesday, marking the fourth consecutive day of withdrawals.

Michael Selig assumes role as new CFTC Chair, what does this mean for crypto?

Michael Selig has been sworn in to serve as the 16th Chairman of the Commodity Futures Trading Commission. Selig was confirmed by the US Senate to head the commission last week, following his October nomination by the US President Donald Trump.

Crypto.com hires sports trader for event prediction market-making

Crypto.com plans to recruit a quant trader for the sports market-making team to buy and sell financial contracts related to these events. Opponents argue that internal trading desks put operators or their affiliates on the opposite side of customer trades. 

Orange Juice Newsletter – Smart insights by real people. Every day.

A free newsletter highlighting key market trends to help traders stay a step ahead. Daily insights on the most relevant trading topics, compiled by our experts in an easy-to-read format so you never miss an important move.

Bitcoin: Fed delivers, yet fails to impress BTC traders

Bitcoin (BTC) continues de trade within the recent consolidation phase, hovering around $92,000 at the time of writing on Friday, as investors digest the Federal Reserve’s (Fed) cautious December rate cut and its implications for risk assets.