Genesis Terminates Crypto Spot and Derivatives Trading Services – What’s Going On?
Digital Currency Group’s Genesis that went bankrupt in January this year, continues to get hit by the bear crypto market. The digital assets lender is winding down its cryptocurrency spot and derivative trading business completely.
Genesis has not explicitly stated the reasons behind the decision, however, a company spokesperson confirmed in an email statement that Genesis will cease offering derivatives trading immediately, while spot trading services will come to a halt on September 21.
“Genesis has decided to stop offering digital asset spot and derivatives trading through GGC International, Ltd. (GGCI),” a September 14 memo, read.
GCCI is a British Virgin Islands company, which is fully owned by Genesis Bermuda Holdco Ltd.
“This decision was made voluntarily and for business reasons. With this termination of services from GGCI, Genesis no longer offers trading services through any of its business entities.”
Earlier this month, US-based Genesis Global Trading, affiliated with the Digital Currency Group and wasn’t affected by the parent company’s bankruptcy in January, announced shutting down its cryptocurrency spot trading service on Sept. 18.
The company said at the time that it is in talks with relevant regulatory bodies, including the New York Department of Financial Services and the US Securities and Exchange Commission (SEC).
Effects of Bankruptcy
At one point, Genesis was considered the largest derivative service provider, before the firm entrapped into a controversy with the Winklevoss brothers’ crypto exchange Gemini, which loaned $900 million of customer funds to Genesis.
Soon, these funds were stuck, preventing Gemini Earn customers from withdrawing assets, affecting over 340K customers. Cameron Winklevoss publicly accused Genesis CEO Barry Silbert of using ‘stall tactics’ to delay the company’s official bankruptcy.
To make matters worse for Genesis, the US SEC charged Genesis and Gemini, on January 12, 2023, over offering unregistered securities through Gemini’s Earn product.
A week later, Genesis filed for Chapter 11 bankruptcy. However, the spot and derivatives trading as well as custody businesses were not part of the bankruptcy filing and continued to operate. The crypto market turmoil resulted in the closing of the trading services as well.
