Genesis has ceased trading services across all its business units, including GGC International, citing voluntary business reasons. Amid spiraling financial woes and regulatory scrutiny from the U.S. Securities and Exchange Commission (SEC), the company filed for Chapter 11 bankruptcy in January but kept its trading arm separate from proceedings.
Last week, digital asset finance firm Genesis announced to its clients via email that it was halting all trading services across its business units, including GGC International, which facilitated the company’s spot trading activities.
Genesis reportedly said the decision “was made voluntarily and for business reasons” while at the same time reassuring clients with open derivatives positions that they would be honored until their expiry. The termination will be effective as of September 21.
Genesis goes from bankruptcy to shutdown
Genesis Global Holdco, the parent company of Genesis Global Capital LLC, filed for Chapter 11 bankruptcy in January, laying off up to 30% of its workforce prior to the filing; the trading arm of the company remained separate from the proceedings.
Genesis was living on borrowed time since it suspended withdrawals last November amidst the fallout from the FTX collapse.
The digital asset lender then got embroiled in a public feud between its parent company, Barry Silbert’s Digital Currency Group (DCG), and the Winklevoss twins of Gemini exchange over failed loan negotiations.
In January, this dispute was further complicated by the introduction of the U.S. SEC, who formally charged Genesis Global Capital and Gemini Trust Company with the offer and sale of unregistered securities in connection with the Gemini Earn digital asset lending program.
The Financial Times reported in January that Genesis owed its creditors over $3 billion, in addition to $900 million owed to Gemini customers and €280 million ($304 million) to the Dutch exchange Bitvavo.
In August, a tentative deal was struck between Genesis and DCG, with the latter agreeing to a series of partial repayments to satisfy liabilities of $630 million in unsecured loans due in May 2023 and $1.1 billion due in 2032. However, this faced opposition from a group of Genesis creditors who described it as “wholly insufficient.”
The latest announcement, on Thursday, of a complete halt in trading by Genesis marks another sorry turning point in the company’s ongoing travails.
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