Crypto Lending Platform Genesis Being Investigated by Securities Regulators

State securities regulators are investigating Genesis Global Capital as part of a wide-ranging inquiry into the inter-connectedness of crypto firms, reportedly.

While it does not directly serve individual investors, Genesis backs products offered by crypto companies such as Circle Internet Financial, the principal operator of one of the largest stablecoins, USD Coin, and by Gemini. Those products pay yield to customers who deposit certain cryptocurrencies on the platforms.

The inquiry will look into Genesis's connection to such retail investors, and whether it or other industry participants might have violated securities laws, the report added.

In the aftermath of the collapse of crypto exchange FTX, Genesis suspended customer redemptions in a spillover effect citing "abnormal withdrawal requests" that exceeded its liquidity.

Several crypto firms have been plagued by contagion concern from the fallout of the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.

(Source: Reuters)