Genesis is bankrupt without new money; Binance turns down the request – Is the market in danger?

  • Genesis Global Trading is the latest to be hit by the FTX contagion as the firm considers bankruptcy to avoid another broad crypto market scandal.
  • Industry analysts criticize Singapore’s financial watchdog for preferential treatment of FTX.

The collapse of FTX signaled another moment in the history of the digital asset ecosystem as yet another victim of the fiasco emerged. Accordingly, the crypto investment bank Genesis Global Trading has mentioned bankruptcy as another option as it seeks more capital to stabilize its business.

More triggers for the industry

Per a recent Wall Street Journal, citing sources familiar with the incident, the troubled digital asset investment platform has sought emergency funding from Apollo Global Management and Binance. Unfortunately, the largest crypto exchange has declined to intervene, citing a potential clash of interests.

Furthermore, the initial news has sent the price of Bitcoin to its lowest in two years, trading at $15,480. However, the price has since reversed to its previous level and is trading at $15,693, according to the latest data.

An executive from Genesis revealed to Bloomberg that the company has no intention to file for bankruptcy. The executive said;

We aim to resolve the current issue amicably, and a bankruptcy filing is the last thing to consider. Instead, Genesis will continue to have constructive interaction with its creditors to find solutions to the problems.

Meanwhile, digital asset traders are keenly following the case’s progress because Genesis is partly owned by the Digital Currency Group (DCG). In addition, the DCG also owned Grayscale Investments, the fund manager of the Grayscale Bitcoin Trust (GBTC).

There is widespread speculation that Genesis’s weak financial health might force DCG to dispose of its assets, ultimately impacting GBTC and spilling over into the broader Bitcoin ecosystem.

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Reacting to the latest development, Naum Sheikh, head of the treasury unit at Wave Financial, a crypto consulting and investment firm, noted that favorable action would bring a market squeeze. In contrast, its opposite will cause severe damage to the broader market.

Singapore regulators come under fire over FTX Collapse

As the crypto market continues to feel the pinch from the crash of the once-mighty FTX exchange, the Monetary Authority of Singapore (MAS) is currently under the spotlight over its purported role in the exchange’s collapse. Last week, MAS attempted to clear its name over various allegations that critics see as support for FTX.

Critics, on the one hand, noted that MAS had given the FTX preferential treatment over others, given that Singapore’s state investment platform, Temasek, has a $210 million investment portfolio with the exchange. Moreover, there was an allegation that the country had entirely written off the investment after the exchange became cash-strapped.

On the other hand, many questioned why MAS placed the Singapore arm of Binance, Binance.sg, on an Investor Alert List (IAL) without including FTX. Regarding the speculation about its treatment of Binance, the regulator had to release a statement addressing the problem.

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According to MAS, Binance was actively wooing Singapore’s residents, contrary to its guidelines, while FTX did no such thing. Another reason given by the regulator is that Binance supported the development of the Singapore Dollar (SGD) to facilitate the onboarding of Singapore-based consumers, whereas FTX did not.

 

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About Author

Paul is a cryptocurrency enthusiast from Canada, and since 2021 he has been writing about cryptocurrency for online news portals. He writes mostly news-related articles. Stay tuned to his posts to stay up to date with the crypto world.

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