Genesis, a well-known player in the digital asset trading industry, made headlines recently when it announced its decision to shut down all of its services. The report, released on September 14, revealed that Genesis would no longer offer digital asset spot and derivatives trading through its subsidiary, GGC International, Ltd. (GGCI). While the company cited business reasons for the closure, it is interesting to note that it was not prompted by any regulatory intervention.
In a surprising move, Genesis’s decision to halt its services extends beyond its over-the-counter (OTC) trading desk for U.S. clients, which was already announced on September 5. The company spokesperson stated that the international services would also be affected. However, conflicting reports suggest that existing open derivatives positions will be honored until expiry and that customers will still be able to manage or close any open positions. Nonetheless, these service terminations mark a significant shift for Genesis.
Genesis has set specific deadlines for the closure of its various services. International services will come to a halt on September 21, while the U.S. desk will cease operations on September 18. Customers have until September 21 to settle their trades, and all accounts will be closed by September 30. These timelines provide a clear roadmap for Genesis customers to navigate the impending shutdown.
Troubles at Genesis and DCG
The closure of Genesis’s services is not an isolated event but rather part of a larger narrative of difficulties faced by Genesis and its parent company, Digital Currency Group (DCG). With Genesis owing over $3.5 billion to creditors, DCG itself is facing legal action from Gemini’s founders. The conflict has also spilled over internally, leading Genesis to file a lawsuit against DCG, claiming that the company owes it more than $610 million.
DCG’s Wider Challenges
Genesis is not the only entity within the DCG umbrella that has faced troubles. In 2023, DCG closed two of its businesses, HQ Digital and TradeBlock. Furthermore, its wallet service, Luno, has been forced to reduce its operations in the U.K. due to upcoming regulations. Luno has also done away with interest-bearing features, emphasizing the far-reaching impact of the challenges faced by DCG and its subsidiaries.
A Conclusion to Genesis’s Journey
As Genesis prepares to shut down its services, the once-prominent player in the digital asset trading industry is set to leave behind a complex legacy. The reasons behind its decision are shrouded in mystery, as the company cites “business reasons” rather than regulatory intervention. With deadlines looming and open positions to be managed, both Genesis and its customers must deal with the consequences of this abrupt closure. Additionally, the wider challenges faced by DCG highlight the interconnected nature of the digital asset world and the need for resilience in an ever-evolving industry.