Genesis, a prominent player in the cryptocurrency industry, has recently announced the closure of all its services. A report on September 14 unveiled the decision, stating that Genesis will no longer offer digital asset spot and derivatives trading through its subsidiary, GGC International, Ltd. (GGCI). This brings an end to all trading services provided by Genesis across its various business entities.
Contrary to regulatory intervention being the catalyst for this decision, a Genesis spokesperson emphasized that the termination of trading services was made voluntarily and for business reasons. The move seems to be a strategic one aimed at addressing challenges within the company.
Genesis had already initiated the closure process by shutting down its over-the-counter (OTC) trading desk for U.S. clients on September 5. However, the recent announcement expands the suspension of services to the company’s international clients as well, effective from September 21.
According to an email sent to customers, open derivatives positions will be maintained until their expiry, and Genesis will continue to support transactions required for managing or closing any outstanding positions. The U.S. desk will cease operations on September 18, with all trades to be settled by September 21. Accounts will then be officially closed on September 30.
This wave of shutdowns is just one facet of the challenges faced by Genesis and its parent company, Digital Currency Group (DCG). Genesis reportedly owes more than $3.5 billion to its creditors, leading to a strained financial situation.
Adding to the tumultuous environment, DCG has been embroiled in a legal dispute with the founders of Gemini, a well-known cryptocurrency exchange. Internally, Genesis took legal action on September 6, claiming that DCG owes it a staggering amount exceeding $610 million. These conflicts further exacerbate the difficulties faced by Genesis.
The consequences of these troubles have rippled through DCG’s subsidiaries as well. Two of its businesses, HQ Digital and TradeBlock, were closed down in 2023 as part of the broader challenges faced by the group. Additionally, Luno, DCG’s wallet service, has been forced to reduce its services in the United Kingdom due to upcoming regulations. Luno had also ceased its interest-bearing features towards the end of 2022.
In light of these circumstances, the future of Genesis remains uncertain. The company’s previous shutdown of crypto lending services, including the popular Earn feature in partnership with Gemini, underscores the scale of the difficulties faced by Genesis. While bankruptcy has only affected its lending division, the mounting troubles across its other operations raise concerns about the viability of the company as a whole.
As Genesis nears the closure of its services, the cryptocurrency community awaits further developments and potential impact on the broader industry. The challenges faced by Genesis and its parent company serve as a sobering reminder of the volatility and risks associated with the ever-evolving world of digital assets.