Key Takeaways
- Genesis Global Capital will continue to provide spot and derivatives trading services.
- Reportedly, Genesis Global Trading’s decision to cease spot trading was voluntary and made for business reasons.
Genesis Global Trading (GGT), an affiliate of the Digital Currency Group (DCG), has announced that it will shut down its cryptocurrency spot trading service on September 18. This decision comes as GGT takes strategic steps to streamline its operations and focus on its core services. GGT had remained unaffected when its parent company’s crypto lending arm, Genesis Global Capital, filed for Chapter 11 bankruptcy in January.
While GGT is closing its cryptocurrency spot trading platform, the DCG-affiliated GGC International will continue to provide spot and derivatives trading services. The closure of GGT’s trading platform will require all trades to be settled by September 21, and any remaining open accounts will be closed by the end of the day on September 30. According to an email from GGT, the decision to cease spot trading was voluntary and made for business reasons.
Genesis Global Capital’s bankruptcy filing in January was preceded by a series of challenges. The company had faced legal action from the United States Securities and Exchange Commission (SEC), which accused it of offering unregistered securities through its Earn program.
This legal issue led to a Chapter 11 bankruptcy filing, adding to a series of setbacks for Genesis Global Capital. Before the bankruptcy filing, the company had laid off 30% of its staff, citing the collapse of Three Arrows Capital as a contributing factor. In November, Genesis had also suspended withdrawals, which it attributed to losses incurred in the collapse of FTX.
The suspension of withdrawals by Genesis had legal implications, sparking a conflict with the Gemini cryptocurrency exchange. Gemini had approximately $900 million tied up in the Genesis Earn program and, coincidentally, was charged by the SEC with unregistered securities offerings around the same time as Genesis.
In late August, Digital Currency Group (DCG), the parent company of both Genesis Global Capital and GGT, reached an in-principle agreement with Genesis creditors to address the claims brought up during the bankruptcy proceedings. This development comes amid reports that Gemini is actively seeking to rally other creditors in an effort to maximize recoveries from the bankrupt crypto lending firm and its parent company, Digital Currency Group.
