Genesis Probed by Alabama State Regulator

Genesis Probed by Alabama State Regulator

Regulations
November 26, 2022 by keithhill530
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[ad_1] Key Takeaways The Alabama Securities Commission and other state regulators are investigating Genesis Global Capital. The investigation focuses on Genesis’ relation to retail investors and connections between crypto firms. Genesis Global Capital suspended redemptions on November 16, leaving customers unable to access their funds. Share this article The Alabama Securities Commission and other state
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Key Takeaways

  • The Alabama Securities Commission and other state regulators are investigating Genesis Global Capital.
  • The investigation focuses on Genesis’ relation to retail investors and connections between crypto firms.
  • Genesis Global Capital suspended redemptions on November 16, leaving customers unable to access their funds.

Share this article

The Alabama Securities Commission and other state regulators are probing Genesis Global Capital.

Alabama Leads Genesis Investigation

Genesis is under investigation.

The crypto lending firm suspended redemptions and new loan originations on November 16 due to FTX’s sudden collapse.

Genesis insists that it is not at risk of bankruptcy and has no material exposure to FTX. However, customers are still unable to access funds and the firm has since called in a restructuring company, signaling that it is in a dire situation.

Now, according to Barron’s, a number of state securities regulators have begun an investigation into Genesis.

Joseph Borg, director of the Alabama Securities Commission, revealed on Friday that his own agency and others from various states are involved in the investigation.

The investigation reportedly focuses on Genesis’ relation to retail investors, on connections between various cryptocurrency firms, and on whether those firms violated securities laws.

Furthermore, the inquiries aim to determine whether Genesis and other companies “enticed residents to invest in crypto-related securities without making the proper registrations”—an allegation that securities regulators frequently level against firms in the crypto industry.

Though Borg did not state which other states were involved in the investigation, the regulator’s past activity may provide some clues. The Alabama Securities Commission worked alongside securities regulators in Texas, Kentucky, and New Jersey in an investigation of bankrupt crypto lender Celsius this summer.

The same regulators also worked together on cases concerning BlockFi, Voyager Digital, and Flamingo Casino Club, making it likely that at least some of these same states are involved in the Genesis case. State regulators from Oklahoma, Vermont, and Washington have also been involved in such investigations in the past.

Neither the Alabama Securities Commission nor any other regulator has made an official announcement on the matter.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other digital assets.

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