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Genesis Trading – the trading division of the cryptocurrency venture capital firm Digital Currency Group (DCG) – is poised to cease its trading activities in the United States later this month.
This halt follows the bankruptcy filing of DCG’s crypto lending subsidiary – Genesis Global Holdco – in January.
Reasons for Ending U.S. Trading
As reported by Bloomberg, a representative for Genesis stated that the company is discontinuing its U.S. trading service for “business reasons.”
“This decision was made voluntarily and for business reasons,” the representative stated. “We are collaborating closely with regulatory authorities to ensure an orderly cessation of services.”
After the collapse of the firm’s lending division earlier this year, DCG had asserted that its trading operations would “continue to operate business as usual.”
In a communication to clients on Tuesday, Genesis indicated that all client trades must be finalized by September 21. Any outstanding accounts will be closed on September 30.
According to the company’s website, Genesis established the first Bitcoin over-the-counter (OTC) trading desk globally in 2013. It has since developed into one of the largest entities in the sector, offering capital and credit solutions to “the world’s most notable digital asset projects, networks, and funds.”
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At its peak, the firm managed $116 billion in spot volume, held over $14 million in active loans, and served more than 1,000 institutional clients. The firm is licensed by the New York Department of Financial Services (NYDFS).
GGC International continues to provide its spot and derivatives trading services.
Several other cryptocurrency firms, including Nexo and Bittrex, have exited the United States over the past year due to regulatory challenges.
Coinbase Steps In
While Genesis and BlockFi have faced significant setbacks, Coinbase has recently taken steps to address the institutional lending void created by both companies.
In a discreet filing on September 1, the company disclosed that it has secured $57 million to establish a platform for over-collateralized crypto lending. After obtaining crypto collateral from clients, the firm can then extend secure loans to institutional clients, similar to prime brokerages in traditional finance.
This service is distinct from the retail-focused Lend service it sought to introduce in 2021, which was canceled prior to launch by the Securities and Exchange Commission (SEC).
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