Another major cryptocurrency exchange could be poised to go bankrupt

Another major cryptocurrency exchange could be poised to go bankrupt

According to reports, Genesis has been facing a liquidity crunch following the rapid mass withdrawal prompted by users spooked by the collapse of FTX. Executives at Genesis have reportedly spent the past several days asking investors for fresh capital, which has not yet materialized.



USD 1 billion in client funds missing at crypto firm FTX

At least USD 1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to Reuters sources.

see more

The rush for funding precipitated by the liquidity crunch at the lender after the sudden collapse of FTX, one of the world’s largest crypto exchanges, led to Genesis halting redemptions, revealing that it had USD 175 million locked in an FTX trading account.

FTX, which had been controlled by 30-year-old multibillionaire Sam Bankman-Fried, filed for bankruptcy after users discovered that the trading firm run by former Bankman-Fried love interest Caroline Ellison, had allegedly been using funds from FTX to make investments. Binance initially made an offer to bail out the company but withdrew the proposal, leading to the venture’s collapse and the resignation of Bankman-Fried

Genesis is owned by Digital Currency Group, which also holds investments in popular exchange platform Coinbase and several dozen other cryptocurrency companies, according to a report from Axios. Genesis ceased withdrawals and new loan originations last week and has been relatively silent over the past several days.

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.

Other platforms are facing their own struggles as redemption requests roll in after FTX’s bankruptcy filing roiled the crypto sector and left investors on edge about the risk of contagion.

Lawmakers increased their skepticism of the cryptocurrency sector in response to the crises. A letter from four members of the Senate Banking Committee to multiple regulators expressed concern over SoFi Technologies, a company that operates as a bank holding company and owns a subsidiary cryptocurrency exchange.

“Over the past year, several meltdowns in the crypto market have wiped out trillions in value, including another huge crash last week,” the lawmakers told SoFi CEO Anthony Noto, requesting information on the company’s compliance with banking standards.

source:

Source link

Related post

Can the AI Bill of Rights shape global AI regulation?

Can the AI Bill of Rights shape global AI…

With innovation changing the way of life and the way of doing business immeasurably in recent years, there are growing calls…
Ferrovial gets the I-66 in the US up and running after $3.600 B investment

Ferrovial gets the I-66 in the US up and…

Ferrovial gets US I-66 up and running Posted By: The Corner 28th November 2022 Intermoney | Ferrovial (Hold, Target Price 24…
Why is Bitcoin Crashing? 3 Reasons Why BTC is Headed Towards $10,000

Why is Bitcoin Crashing? 3 Reasons Why BTC is…

Crypto tycoon Mike Novogratz predicted in early January that 2022 will be a difficult year for cryptocurrency investors. “This will be…

Leave a Reply

Your email address will not be published.