The drama and chaos caused by the collapse of one of the largest cryptocurrency exchanges, FTX, continues after it filed for bankruptcy a couple of weeks ago after facing a severe liquidity crisis. Now, there are several companies that have been able to feel the effect of this situation, since both a large amount of funds and the confidence of a large number of investors have been lost. Next, we present the most relevant news of the week.

One of the hardest-hit companies has been digital asset broker Genesis, which is struggling to raise cash for its lending unit, warning potential investors that it may be required to file for bankruptcy if its efforts fail. Genesis has spent the last few days looking for at least $1 billion dollars, in addition to a possible investment from the Binance cryptocurrency exchange, looking to survive this blow and maintain a solvency that allows it to make the corresponding payments to its investors, unlike what Happened with FTX.

The need for funding was precipitated by a liquidity crisis at the lender after the sudden collapse of the exchange founded by Sam Bankman-Fried, and they have even stopped withdrawals shortly after disclosing on November 10 that they had close to $175 million locked up in an FTX trading account.

It was later revealed that several US state regulators are investigating whether the company may have violated securities laws. Alabama Securities and Exchange Commission Director Joseph Borg has indicated that his agency and several other states are involved in the investigations, which focus on whether Genesis and other companies persuaded citizens to invest in crypto assets without proper requirements.

Neither Genesis nor the Alabama Securities and Exchange Commission have provided an answer, so a lot of uncertainty has been generated.

Another company that have been severely affected is Grayscale Bitcoin Trust (GBTC), who even went so far as to sell Bitcoin for as little as $9,000, that is, with a 45% discount on the spot price of the currency! It is absolutely crazy! It should be noted that the owner of Grascale is the same as Genesis, Digital Currency Group.

However, Grayscale has issued a statement saying that its activities with respect to Genesis do not affect the various Grayscale Trusts, as these assets are held on Coinbase and cannot be lent out. Will both projects fall?

Binance to the rescue? Given what happened, the CEO of Binance, Changpeng Zhao, has declared in an interview for Bloomberg that the company aims to create a recovery fund of one billion dollars so that companies that are going through a bad time or have certain difficulties can buy cryptoassets.

In addition, he mentioned that in case that amount is not enough, he would be willing to allocate more capital to said fund (it is said that the amount could increase up to $2 billion dollars). This continues to enhance the figure of CZ within the ecosystem, since in recent weeks it has been a key player in the industry, consolidating its position as a key leader, after the fall of FTX.

Similarly, it has been revealed that he has received $50 million in commitments from cryptocurrency investment firms, including Jump Crypto, Polygon Ventures, and Animoca Brands. Zhao also shared the address of the public wallet, ensuring that everything will be carried out in a transparent manner. Public blockchain data according to CNBC showed a balance of around $1 billion in BUSD, the Binance stablecoin.

Binance has also made it clear that this is not an investment fund, and is solely intended to support companies and projects facing significant financial difficulties in the short term. Zhao has previously said that his intention is to prevent further cascading contagion effects from the FTX collapse.

Controversy continues over what will happen to former FTX CEO Sam Bankman-Fried, with it revealed that he wrote to his former employees this week apologizing for their role in the collapse and continues to insist that his downfall can be explain only by $8 billion missing.

In a letter, Sam Bankman-Fried wrote: “I deeply regret my failure to supervise. In retrospect, I wish I had done a lot of things differently… I’m going to do what I can to make it up to you, and the customers, even if it takes the rest of my life.”

However, Bankman-Fried said the company was savable, and if he hadn’t been pressured into bankruptcy in mid-November, he could have saved it.

We will not know what would have happened if the company had not declared bankruptcy, but what we do know is that the outlook does not look good for the former CEO of FTX, since various American lawyers assure that according to a series of possible legal violations, Sam Bankman-Fried could spend up to two decades behind bars.

SBF could be charged with violating the US Securities Act for the events that led to a loss of millions of dollars for FTX users. On the other hand, Braden Perry, a partner at the Kennyhertz Perry law firm, has a completely different analysis, arguing that Bankman-Fried could face life in federal prison. What will be the outcome of this story?

In other news, it has been revealed that amid the collapses of FTX-linked companies, Ark Investment Management, owned by acclaimed investor Cathie Wood, has bought shares in one of these companies. Which is this company?

Bitcoin is currently just shy of $16,100, after a week of ups and downs in the $15,500-$17,000 zone. We can see a breach of a support zone that could now form resistance near $17,110, so the short-term outlook seems to point to a possible bearish move. We could see Bitcoin drop as low as $12,500.

BTC/USDT 1D (TradingView chart).

For its part, Ethereum is close to $1,150, likewise below a quite interesting resistance zone, so if this high correlation with Bitcoin is maintained, we could see this asset close to $1,000.

ETH/USDT 1D (TradingView chart).

There is no doubt that the cascade effect was somewhat unpredictable within the crypto asset market, since the fall of FTX meant the loss of a large amount of funds for various companies, and it was also considered one of the safest exchanges within the ecosystem, which which has alerted a large number of investors, who have proceeded to withdraw their funds from the market. While the market recovery seems some way off, large market participants like Binance are doing everything they can to maintain the health and confidence of the crypto ecosystem. Without more to add, we wish you an amazing week.