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One of the leading cryptocurrency retail service providers in hong kong said it had ceased operations due to the wider fallout from the collapse of FTXand solvency issues at other major crypto firms, continue to trouble the industry. Genesis blockwhich at one time operated one of Asia’s largest bitcoin ATM networks, said it would shut down its OTC trading portal on December 10, according to an email to clients sent by its compliance service reviewed by Reuters.

“We stopped trading because we don’t know which counterparties would fail next, so we prefer to close all our positions to regain some of our liquidity,” chief executive Wincent Hung told Reuters this week.

The company is also asking customers to withdraw their funds, the email says, and won’t be accepting new customers.

Genesis Block is unrelated to 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, cutting ties with the failed exchange earlier this month.

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

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

Genesis Block executives declined to comment.

The Genesis Block website still shows a guide on how to buy FTT, the failed exchange’s native token, using the 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 in Hong Kong after Genesis Block sold the business to a third party last year, according to people familiar with the matter.

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

CoinHero did not respond to Reuters’ request for comment. Genesis Block did not respond to questions about 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 related to investor protection enforcement in highly connected countries in a $900 billion crypto world.

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

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

If passed, such a move would represent a major relaxation of the city’s virtual asset service provider licensing regime, which is expected to come into effect in March 2023. The SFC had originally proposed to limit trading to professional investors only. .

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