Genesis Files for Bankruptcy & Crypto Week in Review
The cryptocurrency market, despite experiencing some positive price movements, faces a significant setback this week. Genesis Global, a major crypto lending firm, has officially filed for Chapter 11 bankruptcy protection. This development further illustrates the ongoing repercussions of the FTX exchange collapse, which continues to shake the industry and has ensnared several companies, including Genesis.
Genesis Bankruptcy: The FTX Contagion Continues
The bankruptcy filing from Genesis Global is a direct consequence of the FTX fallout. Following FTX’s collapse in November 2022, Genesis experienced substantial withdrawal requests and liquidity problems. Notably, Genesis held $175 million in assets on the collapsed FTX exchange, exacerbating its financial difficulties. This adds to the growing list of crypto firms affected by FTX’s implosion, raising concerns about the stability of the broader digital asset market and the need for enhanced risk management. The hope remains that the FTX crisis’s negative impact will soon subside and the sector can move forward.
Amidst these challenging circumstances, African countries are approaching the crypto space with caution. This week, Tanzania’s central bank revealed that it’s still evaluating the potential introduction of a Central Bank Digital Currency (CBDC). The bank has adopted a phased and risk-based approach, citing various implementation challenges that must be addressed.
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