According to Barron’s, the crypto lending service Genesis Global Capital has become the subject of an investigation by US regulators in connection with the suspension of withdrawals and the company’s liquidity crisis.
The publication reports that the investigation was “part of a broad investigation into the relationship of cryptocurrency firms, Genesis’ connections with retail investors, and possible violations of securities laws by both Genesis and other companies.”
It’s unclear if federal regulators are involved, but at a minimum, Alabama’s oversight agencies are investigating. They are trying to assess whether Genesis was one of the firms that “enticed residents into investing in crypto-related securities without properly registering their offers.” At the same time, state regulators did not respond to requests from Barron’s.
Recall that Genesis Global Capital is a subsidiary of the venture capital company Digital Currency Group (DGC). Despite DGC’s significant resources, Genesis recently sought a $1 billion investment to save the business. At the same time, as previously reported by the WSJ, the Binance exchange will not be able to provide financial assistance due to a conflict of interest.
Source: Bits
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