Genesis, a subsidiary of Digital Currency Group (DCG), has announced the discontinuation of its spot and derivatives trading services for crypto assets through its British Virgin Islands unit. This decision, attributed to “voluntary and business reasons,” marks another chapter in the ongoing saga surrounding DCG-affiliated crypto trading firms.
Genesis has been providing trading services through its international arm, Genesis Global Capital (GGC), based in the British Virgin Islands. This latest move reflects an earlier decision by Genesis Global Trading, another DCG-affiliated firm, which halted its crypto spot trading services in January, also citing “voluntary and business reasons.” At the time, GGC’s international arm continued to offer spot and derivatives trading.
The troubles for Genesis and its associated entities have been escalating since November 2022, when GGC suspended withdrawals, citing “unprecedented market turmoil.” Reports in January suggested the firm had laid off up to 30% of its staff before filing for Chapter 11 bankruptcy protection in New York. Notably, both Gemini, a cryptocurrency exchange, and Genesis faced charges from the Securities and Exchange Commission for offering unregistered securities through Gemini’s Earn program.
In August, DCG announced an “agreement in principle” with Genesis to facilitate the recovery of creditor funds. Nevertheless, despite these efforts, Genesis still bears a substantial debt of approximately $3.5 billion owed to its top 50 creditors.
This series of events has sent shockwaves through the cryptocurrency industry over the past year, showcasing the challenges and uncertainties surrounding businesses operating in this evolving space. The consequences of these decisions and their broader impact on the crypto lending and trading sector remain subjects of keen interest for industry observers and participants alike.
This year, we have observed that several cryptocurrency exchanges halted their operations due to various reasons. Earlier, in a report by Todayq News on August 15, 2023, Netherlands-based cryptocurrency exchange Txbit ceased operations due to uncertain regulations and unfavorable market conditions, which had made it difficult to maintain profitability. The exchange cited escalating compliance costs and diminishing profit margins as the primary reasons. Also, on September 11, 2023, Coinbase, a major cryptocurrency exchange, discontinued its services in India.