Genesis, a crypto lender, is being investigated by authorities

According to a statement from the director of the Alabama Securities Commission, state securities officials are looking into Genesis Global Capital as part of a broad investigation into the connections among cryptocurrency companies.

Genesis backs the products provided by crypto firms like Circle Internet Financial, the main operator of one of the most popular stablecoins, USD Coin, and Gemini even though it does not directly serve individual investors. Customers who deposit specific cryptocurrencies on the platforms receive yield from such products.

The investigation will examine Genesis's relationship with these small-scale investors and if it or other industry players may have broken any securities laws, according to the report.

Requests for comment on the article from Reuters were not immediately answered by Genesis or the Alabama Securities Commission.

Genesis suspended customer redemptions as a result of the demise of the cryptocurrency exchange FTX, claiming "abnormal withdrawal requests" that exceeded its liquidity.

The New York Times reported earlier this week that Genesis had retained investment bank Moelis & Company to act as the company's restructuring counsel while it looked at possibilities such as bankruptcy.

Numerous cryptocurrency companies have been troubled by concerns of contagion as a result of the repercussions from the FTX collapse, with many estimating their exposure to the troubled exchange to be in the millions.

By fLEXI tEAM