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Genesis Global Capital Hit By FTX Contagion, Withdrawals Suspended Till Further Notice

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Genesis Global Capital Hit By FTX Contagion, Withdrawals Suspended Till Further Notice

Summary:

  • Another crypto firm announced changes to operations due to FTX’s contagion.
  • The lending department of Genesis Global Trading “temporarily suspended” customer withdrawals and new loan originations on Wednesday, CoinDesk reported.
  • Interim CEO Cerar Islim delivered the update during a client call.
  • The operational change did not affect Genesis Trading, the company’s trading division that had exposure to Three Arrows Capital.

Withdrawals on Genesis Global Capital were paused on Wednesday following exposure to Sam Bankman-Fried’s crypto exchange FTX, CoinDesk reported. Interim CEO Cerar Islim first shared the development over a client call on Wednesday. Islim further noted that new loan originations were halted along with withdrawals.

The firm’s parent company Digital Currency Group (DCG) also shared a statement, saying the “decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion”.

DCG also oversees firms like CoinDesk, Foundry, Grayscale, and Luno. After Terra’s $40 billion implosion, Genesis under Michael Moro at the time filed a $1.2 billion claim against Su Zhu’s crypto hedge fund Three Arrows Capital (3AC).

Turbulence with the crypto lender could herald a massive fallout in the crypto industry. Along with damage from FTX’s alleged fraud, Genesis was the biggest lending desk before Terra wiped out $40 billion from the market.

Indeed, what started as the first over-the-counter (OTC) Bitcoin trading desk in 2013 closed out 2021 with around $12.5 billion in active loans and derivatives volume worth $21 billion, per a Q4 Market Activity Snapshot.

Amanda Cowie, VP of communications and marketing at DCG said that the company’s custody and trading outfits remain unaffected by the decision. The company’s derivatives arm reportedly held around $175 million worth of crypto assets on FTX before the exchange froze customer withdrawals.

Genesis Global Capital Hit By FTX Contagion, Withdrawals Suspended Till Further Notice 13

Gemini Earn Program In Trouble After Genesis Halts Withdrawals

Customers of Gemini’s Earn program were also affected by the news. According to a blog post, the crypto exchange will not meet its redemption service-level-agreement period of five days. The platform founded by the Winklevoss twins tapped Genesis as a lending partner.

We are disappointed that the Earn program SLA will not be met, but we are encouraged by Genesis’ and its parent company Digital Currency Group’s commitment to doing everything in their power to fulfill their obligations to customers under the Earn program.

FTX contagion continues to attack firms and cripple operations throughout crypto’s ecosystem. Cerar Islim’s appointment as interim Genesis CEO came after former Michael Moro stepped down. Moro resigned following billions in exposure to Three Arrows Capital, a crypto hedge fund founded by Su Zhu and Kyle Davies.

3AC collapsed after Terra’s contagion spread fear through the market. In a somewhat similar manner, the FTX debacle has seemingly triggered a domino effect in the digital asset community. 

Bankman-Fried’s company has filed for bankruptcy in New York and Delaware at press time. Several U.S. Federal agencies like SEC and Justice Department also launched probes into SBF’s empire/ 

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Amazon Taps The Russo Brothers For TV Series About The FTX Saga

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Amazon Taps The Russo Brothers For TV Series About The FTX Saga
  • Amazon is set to release an eight-part series based on the collapse of FTX.
  • The streaming giant has teamed up with the Russo brothers and David Weil for the production of this series.
  • The Russo brothers have described the FTX scandal as one of the most brazen frauds ever committed. 
  • Apple is also working on a movie based on Sam Bankman-Fried’s activities in the run-up to FTX’s implosion.

Streaming giant Amazon has partnered up with famed directors Anthony Russo and Joseph Russo, also known as the Russo brothers, to release an eight-part TV series based on the spectacular collapse of Bahamas-based crypto exchange FTX.

Amazon will begin production in spring 2023

According to a report by Variety, the streaming firm has teamed up with AGBO, the production company of the Russo brothers who are known for their involvement with several Marvel movies. David Weil is set to be the executive producer of the show, in addition to writing the pilot. The show will go into production in spring 2023 and will be based on “insider reporting” by journalists who covered the downfall of what was once the world’s second-largest crypto exchange. 

This is one of the most brazen frauds ever committed; It crosses many sectors – celebrity, politics, academia, tech, criminality, sex, drugs, and the future of modern finance. At the center of it all sits an extremely mysterious figure with complex and potentially dangerous motivations. We want to understand why.” the Russo brothers said.

Amazon is reportedly trying to get the famed duo to direct the series as well. 

Apple is nearing a deal for book rights on SBF & FTX

Fellow streaming firm Apple is also looking to get a piece of the FTX pie. According to a report by Deadline, Apple is about to close a deal for the book rights to Michael Lewis’ story about the fall of Sam Bankman-Fried and his crypto empire. 

Michael Lewis is known for several books that were adapted into popular movies like Moneyball and The Big Short. Lewis had been following Bankman-Fried for six months before his exchange imploded, taking down several companies with it. The deal is reportedly in the mid-seven figures range and is expected to be adapted into a feature film. 

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Ethereum coders reached consensus on Shanghai update

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Ethereum coders reached consensus on Shanghai update

Summary:

  • Ethereum developers had their weekly call to discuss what features should roll out in the next hard fork.
  • Marius Van Der Wijden said coders were already working toward staked Ether withdrawals prior to the call.
  • Developers will proceed with around eight Ethereum Improvement Proposals for Shanghai, the next technological upgrade.
  • The timeline for the upgrade was unclear at press time. 

Developers at the Ethereum foundation talked on Thursday and decided on eight proposals to explore for Shanghai, the next upgrade after moving to proof-of-stake. The Shanghai hard fork included unlocking staked Ether (ETH) and allowing stakers to withdraw their assets. 

As reported, a multiclient devnet was released on Wednesday to trial staked validator ETH withdrawals. Developers already agreed to push forward with building staked ETH withdrawals before Thursday’s meeting, tweets from Marius Van Der Wijden hinted on Wednesday. 

EIP 4844 was among the eight Ethereum Improvement Proposals (EIP) agreed on. The EIP centers around better scaling by leveraging proto-danksharding technology. Ideally, this tech will boost network throughput and slash transaction fees. Proto-danksharding sections a blockchain into “shards” to achieve this. 

Five EIPs focus on upgrading Ethereum Virtual Machine, the staging area where smart contract codes are deployed. The EVM proposals include EIP 3540, EIP 3670, EIP 4200, EIP 4570, and EIP 5450. 

When Shanghai on Ethereum? 

Indeed, developers reached consensus on eight EIPs to build for the Shanghai hard fork. Not all eight EIPs might ship with the final upgrade expected in the second half of 2023. Also, ETH coders did not finalize a timeline for staked Ether withdrawals. 

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U.S Lawmakers Want DOJ To Launch An Investigation Into FTX

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U.S Lawmakers Want DOJ To Launch An Investigation Into FTX
  • Senator Elizabeth Warren and Senator Sheldon Whitehouse have written to the U.S. Attorney General urging him to launch an investigation into FTX’s downfall.
  • The lawmakers want the investigation to be conducted with utmost scrutiny. 
  • The letter accuses the bankrupt exchange of misleading investors by portraying a false sense of security.
  • The exchange’s celebrity endorsers are already facing an investigation by the Texas State Securities Board

Bahamas-based crypto exchange FTX may soon be under investigation by the United States Department of Justice. Members of the U.S senate have demanded that the Justice Department look into the gross misconduct that took place at what was once the world’s second-largest crypto exchange. 

FTX to be investigated with utmost scrutiny 

Elizabeth Warren, the senator from Massachusetts, and Sheldon Whitehouse, the senator from Rhode Island, have penned a letter to U.S Attorney General Merrick Garland and Assistant Attorney General Kenneth Polite, Jr. The letter urges the DOJ officials to investigate the business activities of FTX with “utmost scrutiny”. 

We write to express deep concern over the disturbing allegations of fraud and illicit behavior that led to the collapse of cryptocurrency firm FTX Trading Ltd and to urge the Department of Justice to hold the company’s executives accountable to the fullest extent of the law.” the letter reads.

The lawmakers have outlined how the downfall of FTX sparked a crypto contagion that left several firms struggling in its wake. These include Genesis Global Trading and Galois Capital, which have $175 million and $100 million stuck on the bankrupt exchange respectively. 

The letter has outlined the attempts made by Sam Bankman-Fried’s companies to portray a sense of safety and legitimacy using celebrity endorsements and expensive advertising campaigns and effectively deceive the investors. Additionally, the lawmakers also talk about the misleading tweets made by SBF in the run-up to the exchange’s bankruptcy. 

According to a report published by Bloomberg, the Texas State Securities Board is looking into the celebrity endorsement campaigns funded by FTX. These include the endorsements by Tampa Bay Buccaneers quarterback Tom Brady and Steph Curry of the Golden State Warriors. 

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