This audio is automatically generated. Please let us know if you have any feedback.
Multiple U.S. regulators are investigating crypto trading firm Genesis Global Capital for potential securities breaches, Barron’s reported Friday.
Alabama Securities Commission Director Joseph Borg said authorities in several other states are involved in the investigation.
Regulators are investigating whether Genesis influenced residents to invest in crypto securities through its platform without having the proper registrations, Borg said, adding Other companies were also examined. He didn’t name her.
Alabama was one of several states last year BlockFi asking why it should still be allowed to sell interest-bearing accounts to state residents, claiming that the product is not registered with the state regulator.
BlockFi agreed to pay $100 million to the Securities and Exchange Commission (SEC) and 32 states in a February settlement. As part of the agreement, the company agreed to stop selling its US interest-bearing accounts and sell a new account tailored to comply with the Securities Act of 1933. In an independent statement, BlockFi filed for bankruptcy on Monday.
Spokespersons for the Alabama Securities Commission and Genesis have not responded to requests for comment on the matter.
Genesis is one of many companies swept up in the demise of crypto trading platform FTX, which went bankrupt this month under the watchful eye of founder and then-CEO Sam Bankman-Fried of billions.
Genesis is reportedly exploring its options, including bankruptcy, due to its exposure to FTX. Genesis also struggled with its exposure to defunct crypto hedge fund Three Arrows Capital, which collapsed earlier this year and impacted the balance sheets of several crypto companies, including Voyager and Celsius.
Genesis’ institutional lending department suspended redemptions and new lending on November 16th.
The enterprise tweeted about a week earlier that $175 million in funds were frozen FTXresulting in its parent company Digital Currency Group raking in $140 million, according to CoinDesk.
The fights of FTX
Regulators in the Bahamas, meanwhile, are keeping tabs on FTX, which is headquartered on the island, and former CEO Bankman-Fried, who lives there.
Bahamas Attorney General Ryan Pinder released a recorded 23-minute statement on Sunday praising Bahamian regulators for their response to FTX’s fall. The exchange is the subject of “an active and ongoing investigation,” said Pinder, who is also one Senator and Attorney General.
“We are in the early stages of an active and ongoing investigation,” Pinder said, calling it “a very complex investigation” involving civil and criminal authorities.
The Bahamas Securities Commission, the Financial Intelligence Unit and the Financial Crimes Unit of the Royal Bahamas Police Force will “continue to investigate the facts and circumstances relating to FTX’s bankruptcy crisis and possible violations of Bahamian law,” Pinder said.