Genesis, a cryptocurrency lending firm that operates as a subsidiary of Digital Currency Group (DCG), is set to discontinue its cryptocurrency asset spot and derivatives trading services provided by its British Virgin Islands-based subsidiary.
In a statement released on September 14th, a spokesperson for Genesis cited "business reasons" for the decision to "voluntarily cease digital asset trading services across all of its entities." Notably, Genesis had been offering trading services through its international arm known as Genesis Global Capital (GGC), based in the British Virgin Islands.
This development follows a prior announcement in January when Genesis opted to terminate its cryptocurrency spot trading services due to similar circumstances and "voluntary and commercial reasons." At that time, GGC's international division was still actively engaged in providing spot and derivatives trading services.
GGC had suspended withdrawals in November 2022, citing the "unprecedented market volatility" of that period. In January, reports indicated the potential for GGC to lay off up to 30% of its workforce, ultimately leading to its Chapter 11 filing bankruptcy in New York . Earlier, the US Securities and Exchange Commission had brought charges against cryptocurrency exchanges Gemini and Genesis, alleging the offer of unregistered securities via Gemini's Earn program.
Genesis had faced significant challenges in the past year, including legal and regulatory complexities involving various DCG subsidiaries and cryptocurrency firms. DCG, the parent company of Genesis, also oversees Grayscale Investments. Genesis attributed part of its difficulties to losses incurred due to the collapse of the cryptocurrency exchange FTX and pointed fingers at Three Arrows Capital for its ultimate downfall.
In August, DCG revealed it had reached an "agreement in principle" with Genesis that would facilitate creditors' recovery of a substantial portion of their funds. However, Genesis' top 50 creditors later expressed dissatisfaction with the proposed agreement, considering it "wholly inadequate ." These creditors were collectively owed approximately $3.5 billion by the company.
