The bankrupt crypto lender Genesis announced that it would cease all of its crypto operations for spot and derivatives trading, for institutional players as well.
Bankrupt crypto group Genesis Global has ceased all of its crypto trading activities. As a result, the Digital Currency Group (DCG) subsidiary will stop offering crypto spot and derivatives trading through its British Virgin Islands unit.
In its statement on Thursday, September 14, the bankrupt crypto lender said:
“Genesis has decided to stop offering digital asset spot and derivatives trading through GGC International, Ltd. (GGCI). 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.”
Since its establishment in 2013, Genesis managed $116.5 billion in spot trading and stood as one of the leading institutional derivatives desks by trading volume. In the third quarter of the previous year, the company reported trading $18.7 billion in derivatives.
The Fall of Bankruptcy and Creditor Repayment
In January, when Genesis’ lending division sought bankruptcy protection, the trading business remained separate from that proceeding. However, industry conditions have deteriorated since that time. Genesis had been a significant player in the market before the troubles began last year, offering trading services to institutional clients.
In November 2022, GGC ceased withdrawals, citing “unprecedented market turmoil” at the time. Reports in January suggested that the company may have laid off up to 30% of its workforce before filing for Chapter 11 bankruptcy protection in New York. Both cryptocurrency entities Gemini, and Genesis, were charged by the Securities and Exchange Commission (SEC) for offering unregistered securities through Gemini’s Earn program.
The bankruptcy, legal disputes, and regulatory complications involving various DCG subsidiaries and crypto firms, including Grayscale Investments, have been a significant topic in the cryptocurrency space over the past year. Genesis attributed its collapse to Three Arrows Capital and reported losses following the failure of the crypto exchange FTX.
In August, DCG disclosed that it had reached a tentative agreement with Genesis, which would enable creditors to reclaim most of their funds. Nevertheless, lenders associated with Genesis subsequently criticized the arrangement as “grossly inadequate”. It’s worth noting that the firm owes approximately $3.5 billion to its principal 50 creditors.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.