Genesis, a prominent digital asset financial firm, has recently announced the discontinuation of crypto derivatives trading through its subsidiary GGC International (GGCI). This move is part of the company’s ongoing efforts to streamline operations and refocus on core areas of expertise. The decision applies to all of Genesis’ business entities and has been made based on strategic business considerations.
Transition and Client Assurance: Genesis has assured its clients that any existing derivatives positions with GGCI will be honored until their scheduled expiry dates. The termination of derivatives trading services is slated for September 21. The company is actively supporting clients in managing and closing any remaining open positions during this transition period.
Potential Influencing Factors: While Genesis has not explicitly stated the specific reasons behind this decision, industry experts speculate that factors such as regulatory uncertainties, market volatility, or evolving client demands may have played a role in the company’s strategic realignment.
Genesis vs. Digital Currency Group (DCG): In parallel, Genesis Global Capital is in negotiations with Digital Currency Group (DCG) regarding the repayment of loans exceeding $610 million that matured in May. Genesis has filed a lawsuit against DCG in a Manhattan bankruptcy court to recover $500 million borrowed under four loans, along with a separate complaint to reclaim 4,550 Bitcoin valued at approximately $117 million.
Genesis’ bankruptcy estate asserts that retrieving these unpaid sums would significantly benefit its financial recovery. The company, however, has indicated its intent to drop the lawsuits if a settlement with DCG is reached. Court documents reveal that DCG owes over $1.7 billion to Genesis and other debtors.
Path to Resolution: Genesis and DCG have reached an agreement in principle, where DCG would pay $275 million and secure $1.16 billion in new credit facilities to meet its obligations. DCG anticipates filing a settlement with the bankruptcy court in the near future, marking a significant step toward the recovery of funds for its creditors.
Background on Genesis: Founded by Barry Silbert in 2013, Genesis filed for Chapter 11 bankruptcy in January after temporarily suspending withdrawals. This move followed substantial loans extended by Genesis to hedge funds Three Arrows Capital and Alameda Research, both of which also filed for bankruptcy in 2022.
Conclusion: Genesis’ decision to discontinue crypto derivatives trading reflects its commitment to strategic realignment and operational efficiency. The ongoing negotiations with DCG signify a pivotal step in the resolution of outstanding financial matters. These developments highlight the dynamic nature of the digital asset industry and the importance of adaptability in navigating its complexities.