Several State securities regulators are keeping an eye on the institutional crypto lender Genesis. They are investigating Genesis as part of a “wide-ranging inquiry into the interconnectedness of crypto firms,” as it may have violated securities laws.
According to Alabama Securities Commission Director Joseph Borg, the focus is on whether Genesis and other companies enticed residents to invest in crypto-related securities without properly registering them.
While Genesis does not directly serve individual investors, it supports crypto companies’ products. Customers who deposit certain cryptocurrencies on the platforms receive a yield from these products.
There has been a lot of focus on Genesis Global Capital and its lending operation, owned by Digital Currency Group (DCG), which required a $1 billion emergency loan before temporarily suspending withdrawals.
Days later, it was revealed that Genesis is struggling to raise new funds for its lending unit and has warned potential investors that the company may have to declare bankruptcy. And in order to avoid this, it has reportedly hired a restructuring expert.
