In recent updates, the bear crypto market has given another blow to Digital Currency Group’s arm Genesis, which had filed for bankruptcy in January this year. Giving in to the less-than-favourable trading environment, Genesis is pulling the plug on its cryptocurrency spot and derivative trading business. A company spokesperson affirmed this decision via an email, kindling questions regarding the motives behind it. Genesis, unfortunately, stayed reticent on the reasons.
According to a memo released on September 14, Genesis is set to discontinue offering digital asset spot and derivatives trading through GGC International (GGCI), a wholly-owned entity based in the British Virgin Islands. Understandably, this harsh step has been prompted by corporate rationale and will see Genesis cease all trading services under its business entities.
It’s a setback for Genesis’ US-based global trading wing, also linked to the Digital Currency Group, yet fortunate to have escaped the brunt of the January bankruptcy. They’ve ostensibly halted their cryptocurrency spot trading service on September 18. Further, Genesis has kept itself busy engaging with relevant regulatory bodies, including the NY Department of Financial Services and the US Securities and Exchange Commission.
Once Genesis was held in high regard as a leading derivative service provider before a public spat with the Winklevoss twins’ crypto exchange Gemini tarnished its reputation. Genesis’ lending of $900 million customer funds to Gemini ignited talk, leading to a blockage of funds and preventing Gemini Earn customers from making asset withdrawals. The impact was widespread, affecting over 340K consumers. To further complicate the situation, the US SEC issued charges over unregistered securities offered through Gemini’s Earn product on Genesis and Gemini.
Genesis’ financial woes led them to declare Chapter 11 bankruptcy a week later. Note that the bankruptcy filing didn’t include spot and derivatives trading or the custody businesses, which continued in operation. As one door closes, another shut still, with the unruly crypto market leading to the demise of trading services as well. It seems the headwinds blowing against Virtual currency groups like Genesis are intensifying, and whether they will withstand the storm raises intrigue.
Source: Cryptonews
