Genesis announces winding down of crypto trading services
Crypto lending firm Genesis, a subsidiary of Digital Currency Group (DCG), will stop offering spot and derivatives trading for crypto assets through its British Virgin Islands unit.
According to a Sept. 14 statement from a Genesis spokesperson, the firm will “voluntarily and for business reasons” wind down its digital asset trading services through all of its entities. Genesis had been offering trading services through its GGC International arm in the British Virgin Islands.
The move followed Genesis Global Trading — a firm also affiliated with DCG but not subject to the same bankruptcy proceedings as Genesis Global Capital — announcing in January it would eliminate its crypto spot trading services under similar circumstances — i.e. “voluntarily and for business reasons”. GGC International had still been offering spot and derivatives trading at the time.
Genesis Global Capital halted withdrawals in November 2022, citing “unprecedented market turmoil” at the time. Reports from January suggested the firm could have laid off as much as 30% of its staff before it filed for Chapter 11 bankruptcy protection in New York. The SEC charged both cryptocurrency exchange Gemini and Genesis for offering unregistered securities through Gemini’s Earn program.
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The bankruptcy, legal, and regulatory entanglements between the various DCG subsidiaries and crypto firms — DCG is also the parent company of Grayscale Investments — have made waves in the space in the last year. Genesis blamed its collapse on Three Arrows Capital and reported it had suffered losses following the failure of crypto exchange FTX.
In August, DCG announced it had reached an “agreement in principle” with Genesis allowing creditors to recover the majority of their funds. However, Genesis lenders later described the deal as “wholly insufficient” — the firm reportedly owes roughly $3.5 billion to its top 50 creditors.
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