Following the collapse of FTX, multiple U.S. regulatory agencies have opened investigations into FTX and other centralized exchanges and operators as the contagion continues.

Now the Alabama Securities Commission and other states are investigating Genesis Global Capital, according to Barron's.

Alabama Securities Commission Director Joseph Borg told Barron's that "several other states" are part of the probe. Borg did not name the other states.

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According to Barron's, the investigation into Genesis is part of a broader probe into how connected many cryptocurrency companies are, and if these companies have violated state securities laws. Borg cited “the interdependencies and interlocking connections in the crypto space” as a point of concern due to contagion risk when a player like FTX goes under. Genesis did not comment for the Barron's story.

On November 16, Genesis suspended customer redemptions and new loan originations on its lending business, citing "abnormal withdrawal requests" after the FTX collapse. The firm had reportedly sought an emergency infusion of $1 billion before halting withdrawals. Genesis pausing withdrawals led to Gemini having to warn customers of withdrawal delays on its Earn accounts, which operate through a partnership with Genesis. By November 21, Genesis warned investors that it faces the possibility of bankruptcy if it can’t raise capital.

"We have no plans to file bankruptcy imminently," a spokesperson for Genesis told Decrypt. "Our goal is to resolve the current situation consensually without the need for any bankruptcy filing. Genesis continues to have constructive conversations with creditors."

In a letter to investors on Tuesday, Barry Silbert, CEO of Genesis parent company Digital Currency Group, tried to sound optimistic, saying that despite owing Genesis $575 million, DCG has a strong future.

"We have weathered previous crypto winters, and while this one may feel more severe, collectively we will come out of it stronger," Silbert wrote.

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In addition to the new investigations, Genesis still has to recover from the collapse of Three Arrows Capital (3AC) earlier this year, which left the firm with a $2.3 billion debt.

The Alabama Securities Commission did not immediately respond to Decrypt's request for comment.

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