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Crypto brokerage Genesis suspends withdrawals, experts concerned about DCG’s health

Major crypto brokerage firm Genesis has suspended withdrawals, hinting at the next major meltdown in the crypto space. Genesis is owned by a massive player in the market, Digital Currency Group (DCG). This move has raised concerns about the company’s health, and multiple experts are drawing similarities between DCG and the Bahamas-based crypto conglomerate, FTX’s downfall.

DCG was initially established in Stamford, CT by Barry Silbert in 2015. The company is currently worth over $10 billion. Thus, undoubtedly the downfall of such a corporation will be “a pretty big deal in crypto,” as Wilfred Daye, CEO of Securitize Capital, pointed out. He added that the company’s footprints are “everywhere” in the crypto space, according to a Bloomberg report.

The crypto corporation has been the cradle of multiple digital asset firms. it founded the news publication Coindesk, the crypto-mining service provider Foundry Digital, the digital currency exchange Luno, the digital-asset manager Grayscale Investments, and the brokerage, Genesis.

The Genesis logo

Genesis was the most valuable firm in the corporation’s portfolio. It is one of the largest crypto brokers in the market and lends dollars or cryptocurrencies to firms to aid their proceeds. The current turbulence in Genesis’ operations might prove fatal for DCG.

With the halt in withdrawals, many investors and experts are questioning the company’s health. A similar trend was observed with the downfall of FTX and its former CEO, Sam Bankman-Fried. He is now under multiple criminal investigations. He went from being a crypto industry leader to an industry villain overnight.

The current trend of crypto downfalls was addressed by Campbell Harvey, a finance professor at Duke University. In an interview with Bloomberg, he said, “There are many lessons to be learned here. In the future, the level of due diligence will likely increase. It is no longer acceptable to have substantial exposure to opaque offshore entities — no matter how popular their founders are.”

Only time will tell whether the final months of 2022 is the last nail in crypto’s coffin.

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