Genesis Global Trading (GGT), which focuses on spot cryptocurrency trading in the United States, is set to cease its operations later this month, as indicated in an email sent to its clients on Tuesday.
GGT plans to shut down its over-the-counter trading platform on September 18. All ongoing trades must be settled by September 21, and any remaining open accounts will be officially closed by the end of the day on September 30. The email communicated that this decision was made voluntarily and for business-related reasons, media reports said.
It’s worth noting that GGT was among a small group of Genesis-affiliated entities that managed to avoid bankruptcy caused by the conglomerate’s involvement in crypto lending earlier this year. According to the email, another segment of the company, GGC International Limited, will continue to provide spot and derivative trading services.
Recent developments have also seen creditors of Genesis Global Capital (GGC) raise concerns about a proposed $175 million deal with the defunct exchange FTX. Allegations suggest that GGC engaged in vote-buying to manipulate bankruptcy proceedings, further complicating Genesis’s efforts to wind down its operations and repay former customers.
Since filing for bankruptcy in January, GGC has been wrestling with how to handle its parent company Digital Currency Group’s (DCG) outstanding debt, which amounts to over a billion dollars. The tentative deal with FTX’s Alameda Research allows them to claim $175 million from the Genesis estate, significantly less than FTX’s initial claim of $4 billion. However, this deal has not gained unanimous support from other creditors, such as Gemini, which is owed approximately $766 million by Genesis.
DCG and its bankrupt crypto lending subsidiary Genesis Global reached an in-principle agreement that could result in Genesis’s creditors recovering up to 90% in USD equivalents. According to a court filing on August 29, DCG claimed that if approved, the plan could lead to unsecured creditors recovering between 70% and 90% in USD equivalents, with the recovery rate potentially ranging from 65% to 90% in digital assets, depending on market fluctuations.
DCG expressed its intention to document the agreement in principle and submit it to the Bankruptcy Court for final approval in connection with the confirmation of a Chapter 11 plan. DCG is eager to move forward with these crucial steps and initiate Genesis’s distributions to its creditors. The filing indicates that Genesis’s liabilities include $630 million in unsecured loans due in May 2023 and a $1.1 billion unsecured promissory note due in 2032.
