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Genesis crypto broker faces ongoing crisis as withdrawals are suspended again

TL;DR

  • Genesis’s latest suspension comes in the wake of a challenging year for the company.
  • NFT market downturn adds to crypto woes.
  • Recovery may take time, dependent on regulatory decisions.

Genesis, a prominent crypto broker, has once again suspended withdrawals, raising concerns in the cryptocurrency community and beyond. The latest suspension comes in the wake of a challenging year for the company, which had filed for bankruptcy earlier in the year. While official communication from Genesis remains scarce, reliable sources confirm the suspension, hinting at deeper financial troubles.

Genesis filed for bankruptcy under the U.S. Chapter 11 bankruptcy procedure. This move allowed the company to restructure its debt to continue its operations. However, it’s important to note that Genesis is part of a group of companies, some of which have also faced bankruptcy, while others are still operational.

On their official website, Genesis expressed their commitment to implementing strategic actions aimed at finding a solution to strengthen their business for the future, signaling an intention to save the company rather than liquidate it. Despite these efforts, the recent suspension of withdrawals indicates that the situation remains precarious.

Genesis Group’s financial challenges 

The decision to suspend withdrawals is a concerning development, particularly because some companies within the Genesis group continue to operate. This suggests that previous measures taken to stabilize the situation may not have been sufficient. The lack of funds in the company’s cash reserves to cover customer receivables, still active, is an alarming signal.

It’s crucial to distinguish between activities that have been closed due to the January bankruptcy and those that are still operational. The freeze on withdrawals appears to pertain to the latter category, which is indicative of liquidity problems extending beyond the previously affected entities.

The situation is dynamic and evolving, and there is no certainty that further developments won’t emerge in the near future. What compounds the concern is the company’s silence regarding the recent withdrawal freeze, which raises questions about their ability to overcome these financial challenges.

The crypto sector as a whole has been facing a challenging climate. Genesis’ recent withdrawal suspension hasn’t had a significant impact on the broader crypto market. This is partly because the group of companies within Genesis, including some that filed for bankruptcy, has been dealing with these issues for months and is actively seeking restructuring.

However, it’s essential to recognize that the ongoing crisis in the crypto sector extends beyond Genesis. Notably, the NFT market has seen a significant downturn this year. For instance, trading volumes on platforms like OpenSea have decreased from over $300 million per month to less than $100 million.

Even as the bear market ended, trading volumes across cryptocurrency markets have remained subdued. Prices may have rebounded, especially in the case of Bitcoin, but trading activity has not followed suit. Many cryptocurrencies and tokens still remain over 90% below their all-time highs, including major ones like Dash, EOS, Algorand, and CAKE (PancakeSwap).

The overall market paints a stark picture, with Bitcoin down 60% and Ethereum down 67% from their peak values.

As the crypto community awaits a hypothetical bull run, it’s important to acknowledge that the crisis could lead to further challenges. While some of the worst may be behind us, with the implosion of the Terra/Luna ecosystem and the failure of FTX, it’s far from certain that the crypto crisis will subside anytime soon.

Moreover, macroeconomic conditions are also a contributing factor. Markets continue to grapple with liquidity shortages due to the strict monetary policies of central banks.

The trajectory of the crypto market will likely depend on what transpires in early 2024, as the SEC potentially approves spot Bitcoin ETFs and Bitcoin undergoes its halving event. It may take almost another year before the crypto markets fully recover, and during this time, other industry players may encounter their own set of problems.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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