Crypto mining company Genesis Digital Assets was the largest venture investment made by Alameda Research, the sister company of FTX and at the center of the exchange's bankruptcy. documents revealed by Bloomberg on December 3 show that Genesis Digital raised $1.15 billion from Alameda in less than nine months.
The capital injection was made before the fall in cryptocurrency prices, between August 2021 and April of this year. Genesis Digital is the leading Bitcoin mining company based in the United States and is not related to Genesis Capital, the trading company with $175 million in funding locked in an FTX trading account.
Former FTX CEO Sam Bankman-Fried recently Recognized participating in Alameda's risk decisions, including the investment in Genesis Digital, despite initially denying it to regulators. Based on the documents, the capital deployment was made by Alameda at four different times: $100 million in August 2021, $550 million in January, $250 million in February and $250 million in April 2022.
Last year, Genesis Digital grossed a total of $556 million through two separate financing rounds to fuel its aggressive growth plans. Some of the funds sought the purchase of 20,000 Bitcoin miners from Canaana new data center in Texas and the expansion of its operations in the US and Northern Europe.
The mining sector has seen its profit margins squeezed by rising energy costs and the bear market. The Latest Hashrate Index Q3 Mining Report highlighted various factors that have led to a significantly lower hash price and higher cost to produce 1 BTC. Income earned by Bitcoin miners fell to two-year lows at $11.67 milliondue to poor market performance and increased computational demand.
The recent FTX crisis is Crypto winter expected to be even longer as investor confidence eroded. A Coinbase report shows that stablecoin dominance hit a new high of 18%, indicating that the liquidity crunch could stretch until at least the end of 2023.
Genesis Digital Assets did not immediately respond to Cointelegraphs' requests for comment.
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