Hong Kong’s Top Retail Crypto Operator Says It Halts Trading As Industry FTX Rolls

HONG KONG, Nov 18 (Reuters) – A leading retail cryptocurrency service provider in Hong Kong said it has suspended trading as the wider fallout from the collapse of FTX and solvency issues at other major crypto firms continue to roil the industry.

Genesis Block, which once operated one of Asia’s largest bitcoin ATM networks, said it would shut down its OTC portal on Dec. 10, according to an email to clients sent by its compliance department reviewed by Reuters.

“We have stopped trading as we do not know which counterparties would default next, so we would prefer to close all our positions to recover some of our liquidity,” Chief Executive Wincent Hung told Reuters this week.

The company is also asking customers to withdraw their money, the email shows, and will not accept new customers.

Genesis Block has nothing to do with a separate crypto player called Genesis Global Capital, which suspended client redemptions this week.

Even before FTX’s bankruptcy, Genesis Block had shut down its Hong Kong operations, according to three people familiar with the situation, severing ties with the failed exchange earlier this month.

A person with knowledge of the matter said a Genesis Block official was previously a director at FTX Hong Kong but resigned from the directorship this month. FTX Hong Kong is one of approximately 130 Sam Bankman-Fried-backed FTX-related companies that have filed for Chapter 11 bankruptcy proceedings in the United States. read more

The people declined to be named because they were not authorized to speak to the press.

Genesis Block executives declined to comment.

Genesis Block’s website still shows a guide on how to buy FTT , the failed exchange’s native token, using its ATM network, which spans 29 locations in Hong Kong and six in Taiwan.

The ATMs are now operated by a brand called CoinHero, which is expanding into Hong Kong after Genesis Block sold the business to a third party last year, according to people familiar with the matter.

CoinHero’s website offers a guide for its customers on how to buy FTT through Genesis Block’s trading desk in Hong Kong.

CoinHero did not respond to Reuters’ request for comment. Genesis Block did not respond to questions on the ATM network.

Genesis Block’s withdrawal from Hong Kong, ranked by market data provider Forex Suggest as one of the most “crypto-ready” cities in the world in terms of the number of ATMs relative to its population, highlights the challenges of enforcing investor protection in a $900 billion connected crypto world. read more

In Hong Kong’s bustling Causeway Bay shopping district, cryptocurrencies bitcoin, tether and dogecoin can be traded easily at both ATMs and trading desks.

Meanwhile, the city’s Securities and Futures Commission (SFC) is currently consulting with the industry on its proposal to allow retail trading of virtual assets in a move it hopes will boost Hong Kong’s status as a hub fintech. read more

If approved, such a move would represent a significant relaxation of the City’s virtual asset service provider licensing regime, which is expected to come into force in March 2023. The SFC had originally proposed restricting trading to professional investors only.

Report by Georgina Lee. Edited by Kenneth Maxwell

Our Standards: The Thomson Reuters Trust Principles.

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