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November 14, 2022

Crypto brokerage Genesis to receive $140m infusion as FTX collapses

Cryptocurrency brokerage Genesis is set to receive an equity infusion of $140m from its parent company Digital Currency Group after the collapse of American cryptocurrency exchange FTX.

The fresh infusion will help the company to boost its balance sheet, Genesis stated in letter to its clients that was shared by Wu Blockchain on its Twitter page.

It will also be used by Genesis to strengthen its position in the crypto capital markets as well as serve its customers.

Genesis also noted that its lending and trading businesses were not affected by the recent turmoil in the crypto market.

However, the company revealed that its derivatives business has around $175m in funds locked in its FTX trading account.

In a Twitter thread, Genesis said: “Our operating capital and net positions in FTX are not material to our business.

“Circumstances surrounding FTX have not impeded the full functioning of our trading franchise.”

The announcement comes after FTX and around 130 of its affiliated firms filed for Chapter 11 bankruptcy protection on 11 October 22 in the US.

FTX founder Sam Bankman-Fried has also resigned from his position as CEO.

Considered to be the biggest crypto-related bankruptcy so far, the disaster could eliminate billions of equity value, reported The Wall Street Journal.

Prior to the bankruptcy, FTX secured significant investment from several investors in Silicon Valley in January this year at a valuation of $32bn.

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