Crypto broker Genesis has made a significant decision to stop its customers from withdrawing funds, which adds more uncertainty to the already turbulent world of digital currencies.
This move follows the court’s approval of a $175 million settlement between Genesis and the now-bankrupt cryptocurrency exchange FTX.
The news of Genesis halting customer withdrawals was first shared on X (formerly Twitter) by @WatcherGuru. The decision to halt withdrawals comes as Genesis had already revealed its intentions to discontinue its cryptocurrency trading operations in September. As part of this transition, Genesis has ceased its digital asset services following an agreement with Digital Currency Group (DCG) related to recovery payments and its ongoing bankruptcy proceedings.
In its September announcement, the company had explained that it was discontinuing its crypto trading services due to voluntary business considerations. The decision specifically affected digital asset spot and derivatives trading through GGC International, Ltd. (GGCI), resulting in the termination of trading services across all of its business entities.
The suspension of customer withdrawals is a significant development following Genesis’s bankruptcy filing earlier in the year, which was prompted by the Gemini Exchange’s refusal to assist in customer withdrawals. This issue escalated, ultimately leading to legal intervention and a settlement between Genesis and FTX, shedding light on the challenges faced by the company and the broader crypto industry.
Decision Comes Day After Settlement With FTX
Just a day after a court approved a $175 million settlement between FTX and Genesis, the decision to suspend withdrawals was made. In the United States Bankruptcy Court for the Southern District of New York, the settlement was given the green light. It allows Genesis debtors to abide by the settlement agreement and pay $175 million to FTX.
This resolution stems from various claims FTX made against Genesis, resulting in a substantial reduction from the initial $3.9 billion claim. While Genesis views the settlement as “fair and equitable,” some FTX creditors have expressed dissatisfaction, leading to contested resolutions.
These events occur amidst the ongoing trial of FTX founder Sam Bankman-Fried, who faces charges like fraud and money laundering. The situation underscores the challenges currently facing the crypto industry.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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