Already on Monday, it was revealed that the U.S. Department of Justice (DOJ) has teamed up with officials from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to investigate FTX’s business practices.
Specifically, the regulators’ focus is on how FTX handled customer funds while trying to prop up its sister firm, Alameda Research.BREAKING: FBI to extradite SBF to the U.S – DailyMail About time! — Bitcoin Archive (@BTC_Archive)
Is FTX Contagion Taking Hold Of Genesis Trading Today?
Several crypto firms have already disclosed their exposure to FTX and Alameda. While some are simply writing off the losses to zero, other firms have been hit harder. BlockFi has halted all withdrawals and is preparing for bankruptcy unless it recovers its funds from SBF.While the operation of our lending and trading businesses has not been impacted by recent market events, Genesis has taken steps to strengthen its balance sheet with an additional equity infusion of $140M from our parent company, Digital Currency Group.
However, Autism Capital, a Twitter channel that has received strong attention in the wake of the FTX collapse due to its proximity to the events, is warning of another hard blow to the crypto industry.
At presstime, the Bitcoin seemed unfazed by the rumors and was trading at $16.596. Levels of importance for Bitcoin are $17.3K and $18K to the upside as well as $14K and $16.5k to the downside.They are having a call with their creditors tomorrow at 8 AM EST to explain the situation. If true, they may possibly be dissolving ETHE and GBTC to pay back their lenders. We will know more tomorrow.
We are aware that Grayscale controls GBTC and ETHE, not Genesis. DCG (the parent company of Genesis and Grayscale) is backstopping Genesis, and dissolving the trusts may be necessary if there is a solvency issue, and if it is big enough.
[Update:] Genesis is halting withdrawals for the time being.
We recognize how challenging this past week has been due to the impact of the FTX news. At Genesis we are entirely focused on doing everything we can to serve our clients and navigate this difficult market environment. — Genesis (@GenesisTrading)