Genesis bankruptcy warning weighs on crypto markets

(Bloomberg) — Crypto brokerage Genesis warned of the risk of bankruptcy amid contagion from the rapid demise of Sam Bankman-Fried’s FTX empire.

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Tampa Bay Buccaneers quarterback Tom Brady and Steph Curry of the Golden State Warriors are among the celebrities under investigation by a Texas regulator for possible securities law violations related to their promotions of FTX.

The fall of Bankman-Fried’s operations, including trading desk Alameda Research, is contributing to reduced liquidity in crypto markets.

Concerns about Genesis and other ailing crypto outfits, such as BlockFi Inc., are unnerving investors. A sell-off in Bitcoin ended Tuesday, but the token remains near its lowest level since November 2020.

Key stories and developments:

  • Crypto company Genesis said to warn of bankruptcy without new funds

  • Bitcoin’s slide pauses waiting for the next Domino to fall after FTX

  • US prosecutors opened investigations into FTX months before it collapsed

  • Tom Brady, Steph Curry pull Texas’ investigation into FTX plugs

(Time references are New York unless otherwise noted.)

FTX Group Bankruptcy Filing Shows $1.24 Billion Cash Balance (1:30pm HK)

A bankruptcy filing from the FTX Group revealed that the fallen cryptocurrency exchange and a number of affiliates had a combined cash balance of $1.24 billion.

The latest Nov. 20 tally “identifies substantially higher cash balances than accounts receivable could prove on Wednesday, Nov. 16,” the filing said.

Bahamas Agrees To Let Delaware Judge Handle Part Of FTX Meltdown (8am HK)

Bahamas court officials dropped their opposition to moving part of the FTX restructuring case to a U.S. court in Delaware, according to a court filing.

Liquidators appointed in the Bahamas for a branch of FTX agreed to move a case they filed in New York to Delaware, where more than 100 units are under the supervision of a federal judge, FTX said. attorneys in documents filed with U.S. Bankruptcy Court in Wilmington, Delaware. .

FalconX says it will resume use of Silvergate payments network (07:40 HK)

Institutional cryptocurrency platform FalconX said it will resume allowing customers to use Silvergate Capital Corp.’s payment system. can use to transfer money after suspending it last week.

Uncertainty about cryptocurrency market conditions in the wake of FTX’s collapse and an outage that hit Silvergate’s “wire payment network” led to the suspension, FalconX said in a memo to customers Monday. Since then, concerns have eased, San Francisco-based FalconX said.

Tom Brady, Steph Curry Pull Texas Investigation Over FTX Plugs (7:15am HK)

A Texas regulatory body is looking into payments received by celebrities to endorse FTX US, along with what revelations were made and how accessible they were to retail investors

Tampa Bay Buccaneers quarterback Tom Brady and Steph Curry of the Golden State Warriors are among the high-profile people under investigation.

Bitcoin Nears Lowest Since November 2020 (7:10am HK)

Cryptomarkets continue to be weighed down by concerns about the spreading fallout from the FTX crisis. Bitcoin faltered on Tuesday, trading below $16,000 around its lowest level since November 2020. A measure of the top 100 digital assets is down more than 70% in the past year.

Crypto Firm Genesis Said To Warn Of Bankruptcy (6pm HK)

Digital asset brokerage Genesis is struggling to raise new money for its lending unit and is warning potential investors that it may have to file for bankruptcy if its efforts fail, according to those in the know.

Genesis, which has faced a liquidity crisis in the wake of crypto exchange FTX’s bankruptcy filing this month, has spent the past few days seeking at least $1 billion in fresh capital, the people said. That included talks about a potential investment from crypto exchange Binance, they said, but funding has so far failed to materialize.

US prosecutors opened investigation into FTX months before it collapsed (4:14 pm)

Long before Sam Bankman-Fried’s FTX cryptocurrency empire collapsed this month, it was already on the radar of federal prosecutors in Manhattan.

The U.S. Attorney’s Office for the Southern District of New York, led by Damian Williams, spent several months conducting a sweeping investigation of U.S. and offshore-armed crypto-currency platforms and began delving into FTX’s massive exchange operations, according to people in the know. are with the research.

Fidelity Must Rethink Bitcoin Exposure in 401(k)s: Senators (3:43 p.m.)

Democratic Senators Dick Durbin, Elizabeth Warren and Tina Smith are urging Fidelity Investments to reconsider allowing sponsors of 401(k) plans to offer exposure to Bitcoin.

“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear that the digital asset industry is in serious trouble,” the senators said in a letter to Fidelity CEO Abigail Johnson.

Tiger Global’s now worthless FTX bet had Bain’s due diligence (3:03pm)

Bain & Co. was one of several consultancies that helped conduct due diligence for Tiger Global Management’s investment in the now-defunct crypto exchange FTX, according to people familiar with the matter.

Tiger Global, which pays Bain more than $100 million a year to research private companies, has now written its $38 million FTX stake down to zero, the people said. Sam Bankman-Fried’s oversight of a vast web of FTX-linked entities was one of the risks that came up during the due diligence process, but the money manager still believed it was a good investment at the time, one of the people said.

Cathie Wood to Buy on Coinbase as Wall Street Sours (12:21 pm)

Wall Street’s Declining Confidence in Coinbase Global Inc. Cathie Wood has done little to deter. Instead, she has scooped up shares of the struggling cryptocurrency exchange in the wake of FTX’s collapse.

Wood’s Ark Investment Management funds have bought more than 1.3 million shares of Coinbase since early November, worth about $56 million based on Monday’s trading price, according to data compiled by Bloomberg. The buying spree, which started just as FTX’s demise began, has boosted Ark’s total holdings by about 19% to about 8.4 million shares. That equates to about 4.7% of Coinbase’s total shares outstanding.

‘Alameda Gap’ Helps Liquidity Dry Up in Crypto Market (11:26 am)

Wiping out Sam Bankman-Fried’s crypto empire, including its crown jewel FTX exchange and sister trading desk Alameda Research, helps reduce liquidity in the crypto market.

The drop has been dubbed the “Alameda Gap” by blockchain data company Kaiko, named after the trading group at the center of the storm that is closing its books. Liquidity dips usually come during periods of volatility when trading stores pull bids and asks from their order books to better manage risk, Kaiko noted in a Nov. 17 newsletter.

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