Genesis Global Capital has officially announced its intention to discontinue its crypto spot trading services. This significant decision, made “voluntarily and for business reasons,” is set to reshape the landscape of digital asset trading.
Genesis Takes a Step Back
Genesis, a prominent crypto lending firm and subsidiary of Digital Currency Group (DCG), is making waves in the crypto world. This is by putting an end to its spot and derivatives trading services for crypto assets. which were previously offered through its British Virgin Islands unit.
A statement released on September 14th by a Genesis spokesperson confirms that the firm will wind down its digital asset trading services across all its entities. It’s important to note that Genesis had been actively offering trading services through its international arm, Genesis Global Capital (GGC), based in the British Virgin Islands.
Parallel Actions within the DCG Umbrella and Navigating Troubled Waters
Interestingly, this move parallels an earlier decision made by another DCG-affiliated firm, Genesis Global Trading. In January, this entity also opted to eliminate its crypto spot trading services for similar reasons – “voluntarily and for business reasons.” At that time, GGC’s international arm continued to operate its spot and derivatives trading services.
The road leading to this decision was not without its challenges. GGC faced a turbulent period in November 2022 when it halted withdrawals, citing “unprecedented market turmoil.” Reports from January suggested significant layoffs within the company. This was up to 30% of its workforce. Eventually, GGC filed for Chapter 11 bankruptcy protection in New York.
The Securities and Exchange Commission also entered the picture. It charged both cryptocurrency exchange Gemini and Genesis for offering unregistered securities through Gemini’s Earn program.
Adding to the complexities, Genesis attributed its collapse to Three Arrows Capital. It also reported substantial losses following the failure of crypto exchange FTX.
DCG’s Involvement and Creditors’ Plight
In August, DCG made headlines by announcing an “agreement in principle” with Genesis. This offered a substance of hope to creditors looking to recover their funds. However, this optimism was short-lived as Genesis lenders expressed dissatisfaction, deeming the deal “wholly insufficient.” Reports suggest that the firm owes approximately $3.5 billion to its top 50 creditors.
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