Tag: genesis

Cryptocurrency Firms Gemini, DCG, Genesis Sued in US for Alleged $1 Billion Fraud

New York Attorney General Letitia James on Thursday sued cryptocurrency firms Genesis Global, its parent company Digital Currency Group (DCG) and Gemini for allegedly “defrauding” investors of more than $1 billion (roughly Rs. 8,317 crore). 

The development underscores the challenges the crypto industry continues to face almost a year after the bankruptcy of Sam Bankman-Fried’s exchange FTX, which led to a meltdown in the sector that overwhelmed several major firms. 

Through the lawsuit, Attorney General James is seeking restitution for investors and “disgorgement of ill-gotten gains,” along with a ban on all the three cryptocurrency firms from the financial investment industry in New York. 

At the heart of the lawsuit is a programme that Gemini ran in partnership with Genesis, dubbed “Gemini Earn”. The program allowed customers to lend crypto assets such as bitcoin to Genesis. 

Gemini, run by the Winklevoss twins best known for their legal battle against Meta Platforms’ Mark Zuckerberg, had billed the program as a “low-risk investment” even when its internal analyses had found Genesis was on risky financial footing, James alleged. 

Gemini knew Genesis’ loans were undersecured and at one point highly concentrated with one entity, Bankman-Fried’s crypto hedge fund Alameda that later went belly up, James said. 

Gemini did not reveal any of this information to the investors of Gemini Earn, she added. 

Gemini posted on messaging platform X, formerly known as Twitter, that the lawsuit “confirms what we’ve been saying all along”, but disagreed with the decision to also sue Gemini. 

Genesis and Gemini have clashed several times over the past few months, including over Gemini Earn. Gemini is also the largest creditor of Genesis, which filed for bankruptcy protection in January. 

DCG said it was blindsided by the attorney general’s complaint and the company’s CEO Barry Silbert said the lawsuit had “baseless allegations”. 

“We fully intend to fight the claims and look forward to being vindicated in this case … we have actively cooperated for months with the attorney general’s investigation,” DCG added. 

DCG assumed certain liabilities of Genesis last year to mitigate the hit to the unit from its exposure to bankrupt crypto hedge fund Three Arrows Capital. 

“Last year, my and DCG’s goal was to help Genesis weather the storm caused by the collapse of Three Arrows … it is unfortunate that this lawsuit omits that fundamental fact,” Silbert said. 

© Thomson Reuters 2023

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Genesis, Huobi Resort to Staff Layoffs as Market Pressure Continues to Intensify: Reports

Two crypto firms — Genesis and Huobi — have grabbed the attention of the crypto community, after reportedly decided to cut down on their respective work forces. Genesis is a crypto-lending platform whereas Huobi is a crypto exchange platform. The companies are evidently trying to cut the cost around their business operations in the midst of the ongoing market slump. The overall crypto market situation, that has remained stuck to the global valuation of within $820 billion (roughly Rs. 67,76,234 crore) for weeks now, failed to show any major improvement in the first week of 2023.

In the case of Huobi, its native HT token dropped by eleven percent in the last 24 hours and slipped by 30 percent in the last one month. As per a CoinDesk report, Huobi is terminating 20 percent of its work force. The affected staffers mare reportedly those who have refused to draw salaries in its HT native coin.

The company confirmed its decision hours after Justin Sun, the TRON founder-turned-advisor for the exchange last year,  denied that Huobi was looking to let go of its employees.

On Twitter people familiar with the matter claimed that the Seychelles-based crypto exchange is facing the impacts of a slumped market and has also closed internal communications.

Huobi is not the only company suffering amid rough market waves. The ongoing market slumphas also destabilised the position of Genesis, which is a New York, US-based crypto lending firm now mulling filing for bankruptcy.

The company in November, Genesis had asked for a loan of $1 billion (roughly Rs. 8,263 crore) from investors, after the downfall of the FTX crypto exchange.

To protect its business from going bankrupt for now, Genesis has laid off 30 percent of its work force, making for sixty people to keep its business afloat.

Between 2021 and 2022, the overall crypto sector lost over $2 trillion (roughly Rs. 1,65,74,700 crore). The Russia-Ukraine war, the recession that followed the COVID-19 pandemic, repeated hack attacks, and the collapse of promising crypto projects like LUNA and FTX slashed investor engagement in the sector.

The industry may take a while to recover from the ongoing crypto winter, industry analysts have predicted.

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Genesis Warns Investors of Possible Bankruptcy Without Fresh Funding After FTX Collapse: Report

Digital asset brokerage Genesis is struggling to raise fresh cash for its lending unit, and the firm has warned potential investors that it may need to file for bankruptcy if its efforts end up to no heed, according to a Bloomberg News report. The firm has faced a liquidity crunch since FTX filed for bankruptcy earlier this month and has reportedly been trying to raise at least $1 billion (roughly Rs. 8,118 crore), having approached both Binance and Apollo Global Management. The possible bankruptcy also underscores how FTX’s collapse sent shockwaves through the wider crypto ecosystem that are showing no signs of abating.

“We have no plans to file bankruptcy imminently,” a representative for Genesis said in a statement to Bloomberg. “Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors.”

The rush for funding was precipitated by a liquidity crunch at the lender after the sudden collapse of FTX, one of the world’s largest crypto exchanges.

Genesis Global Capital, the lending business of Genesis Trading, last week temporarily suspended redemptions and new loan originations in the wake of FTX’s collapse and the implosion of Three Arrows Capital earlier this year. At the time, parent company Digital Currency Group said business operations at DCG and its other wholly owned subsidiaries were not affected.

DCG gave Genesis Trading an equity infusion of $140 million (roughly Rs. 1,136 crore) after it said its derivatives business had $175 million (roughly Rs. 1,420 crore) locked up on the FTX platform. “Genesis has no material exposure to FTT or any other tokens issued by centralised exchanges,” the firm said in a tweet on November 9.

The news shook crypto investors as Bitcoin extended its intraday slump to as low as $15,649 (roughly Rs. 12.7 lakh), though the token has since erased some of those losses, priced currently at $15,732 (roughly Rs. 12.77 lakh).

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eBay Debuts Sports-Themed NFT Collection on Polygon, Tezos-Based ‘OneOf’

US-based online e-commerce giant eBay has ventured into the world of non-fungible tokens (NFTs) with the release of its debut collection on the ‘OneOf’ NFT platform. This marks eBay’s first foray into the world of digital collectibles. Its first NFT collection is themed around sports and the price range of its pieces go from $10 (roughly Rs. 775) to $1,500 (roughly Rs. 1.15 lakh). NFTs have been witnessing major attraction from Web3 supporters. Inspired by game characters, avatars, and art among other things, NFTs make for an integral part of the virtual assets category as well as the Web3-backed metaverse sector.

‘Genesis’ is the name of eBay’s NFT collection. It features 3D and animated representation of Canadian hockey legend Wayne Gretzky. NFT versions of other sport players who made it to the covers of the Sports Illustrated magazine over the years, have also been listed for sale.

In a Twitter post, eBay shared a glimpse of its NFT series.

“NFTs and blockchain technology are revolutionising the collectibles space, and are increasingly viewed as an investment opportunity for enthusiasts,” said Dawn Block, VP Collectibles, Electronics, and Home at eBay.

Meanwhile, for ‘OneOf’, this is just another feather in the hat. The platform is popular among celebrities and brands, especially from the music industry.

In December last year, American rapper Pitbull aka Mr. Worldwide entered into a multi-layer deal with OneOf with an undisclosed amount of money in the loop. The singer-rapper is expected to launch his own NFTs later.

In 2021, music industry’s most prestigious awards, The Grammys also partnered with OneOf for a three-year series of NFTs.

“You don’t have to be a crypto expert to buy, sell, and collect NFTs. OneOf and eBay are bringing transformative Web3 technology to the next 100 million non-crypto-native mass consumers,” Lin Dai, the CEO of ‘OneOf’ said in a statement.

The sales of NFTs reached some $25 billion (roughly Rs. 1,84,700 crore) in 2021 as the speculative crypto asset exploded in popularity, data from market tracker DappRadar showed.

Several established platforms from various sectors are chasing NFTs to get more engagement on their platforms.

This month for instance, link aggregator platform LinkTree added NFT features to its platform.



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