Per a report from The Block, Genesis, a prominent digital asset financial firm, has announced the discontinuation of crypto derivatives trading through its subsidiary GGC International (GGCI). The company conveyed this decision to its clients in an email on Wednesday.
Genesis Continues To Scale Back Services
According to the report, The company clarified that this decision applies to all of its business entities and was made voluntarily based on strategic business considerations.
Genesis has assured its clients that any open derivatives positions with GGCI will be honored until their expiry dates.
In recent weeks, Genesis has been implementing strategic changes and scaling back its services as part of its ongoing efforts to streamline operations and focus on core areas of expertise.
This move to halt digital asset derivatives trading through GGCI aligns with the company’s broader strategic realignment.
Furthermore, the firm has fully supported clients in managing and closing any remaining open positions. The termination of derivatives trading services is scheduled for September 21.
While Genesis has not explicitly disclosed the reasons behind its decision, market observers speculate that factors such as regulatory uncertainties, market volatility, or shifting client demands may have influenced the company’s strategic realignment.
Genesis And Digital Currency Group Clash
Genesis has filed a complaint in a Manhattan bankruptcy court seeking to recover $500 million borrowed by DCG under four loans. Additionally, Genesis has filed a separate complaint to reclaim 4,550 Bitcoin, valued at around $117 million, owed by the affiliated Digital Currency Group International under a fifth loan.
The bankrupt firm argues that recovering the unpaid sums would significantly benefit its bankruptcy estate, but alleges that DCG is wrongfully in possession of the funds.
However, Genesis has indicated that it is currently in talks with DCG for partial repayment and intends to drop the lawsuits if a settlement is reached.
According to court documents, DCG owes more than $1.7 billion to Genesis and other debtors. On August 29, Genesis announced it had agreed in principle with DCG and unsecured creditors.
Under the proposed agreement, DCG would pay $275 million and obtain $1.16 billion in new credit facilities maturing in two or seven years to fulfill its obligations.
In response to the lawsuit, DCG stated that it expects to file a settlement with the bankruptcy court soon and aims to initiate the distribution of funds to creditors, thereby progressing toward significant recovery for the company’s creditors.
The company, founded by Barry Silbert in 2013, filed for Chapter 11 bankruptcy in January after halting withdrawals. The bankruptcy filing followed significant loans made by Genesis to hedge funds Three Arrows Capital and Alameda Research, both of which also filed for bankruptcy in 2022.
Featured image from iStock, chart from TradingView.com