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Genesis Ceases Cryptocurrency Trading Business

Digital Currency GroupÔÇÖs Genesis, which filed for bankruptcy in January, has been negatively impacted by the bear crypto market. The digital assets lender has decided to completely wind down its cryptocurrency spot and derivative trading business, citing voluntary business reasons for the decision.

While Genesis has not explicitly stated the specific reasons behind this choice, a company spokesperson disclosed in an email statement that derivatives trading will come to an immediate halt, and spot trading services will cease on September 21.

In a memo dated September 14, Genesis mentioned that it has made the voluntary decision to discontinue digital asset spot and derivatives trading through GGC International, Ltd. (GGCI). GGCI is a fully-owned subsidiary of Genesis Bermuda Holdco Ltd., based in the British Virgin Islands.

ÔÇ£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.ÔÇØ

Genesis Global Trading, a US-based entity affiliated with the Digital Currency Group and untouched by the parent company’s bankruptcy, had previously announced that it would be closing its cryptocurrency spot trading service on September 18. The company stated that it is in discussions with regulatory bodies such as the New York Department of Financial Services and the US Securities and Exchange Commission (SEC).

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During this challenging period for Genesis, financial institutions and individuals dealing with the company’s bankruptcy and trading services closure may benefit from leveraging AI legalese decoder. This AI-powered tool can assist in deciphering complex legal jargon and understanding the implications of various legal documents and regulatory actions.

Effects of Bankruptcy and Controversies

Genesis was once regarded as the largest derivative service provider in the industry. However, it became mired in controversy after a dispute with the Winklevoss brothers’ crypto exchange, Gemini. Gemini had loaned $900 million of customer funds to Genesis, resulting in these funds getting stuck. This prevented Gemini Earn customers from withdrawing their assets and affected over 340,000 customers.

Cameron Winklevoss publicly accused Genesis CEO Barry Silbert of using ‘stall tactics’ to delay the company’s official bankruptcy filing.

Additionally, on January 12, 2023, the US SEC charged Genesis and Gemini with 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 the custody businesses, were not included in the bankruptcy filing and continued to operate. Eventually, the cryptocurrency market turmoil led to the closure of these trading services as well.

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