The year 2022 was marked by chaos in the cryptocurrency sector, with the legacy of a significant crash continuing to exert pressure on the market. Genesis, once a leading crypto lender, faced bankruptcy but is now nearing the end of its ordeal after its parent company, Digital Currency Group (DCG), settled its debts. This development is part of a broader trend where major sources of fear, uncertainty, and doubt (FUD) are being addressed, setting the stage for a potential crypto bull run.
Recent months have seen a reversal from the negative sentiment of 2022, with crypto prices moving in the opposite direction. This positive shift is being reinforced by Binance’s settlement with U.S. authorities, Tether resolving several issues, and Circle’s plans to go public. DCG’s repayment of its massive debt to Genesis and the latter’s settlement with the New York regulator are contributing to the end of FUD in the market.
Genesis faced significant failures in anti-money laundering and cybersecurity programs, leading to the loss of its BitLicense and a requirement to cease operations in New York, along with an $8 million fine. The relatively low penalty reflects Genesis’s cooperation during the investigation and efforts to review its programs. Despite this, Genesis must halt all activities in New York.
With the support of DCG’s payments, there is an expectation that debts owed to Gemini will be settled, addressing the grievances of those affected. The issues caused by the crypto lending market, including negligence and disregard for borrowers’ ability to repay, led to market turmoil. U.S. regulators are expected to consider these events in future regulations to prevent similar issues.
Overall, the crypto market is moving past a period of intense FUD, with regulatory settlements and corporate actions restoring confidence. The resolution of Genesis’s legal troubles and the anticipation of more robust regulatory measures are seen as positive steps towards market stability and growth.