Per a report from The Block, Genesis, a renowned digital asset financial firm, recently made an announcement regarding the discontinuation of crypto derivatives trading via its subsidiary GGC International (GGCI). The company communicated this decision to its clients through an email sent on Wednesday.

Genesis Continues To Streamline Services

According to the report, the company clearly stated that this decision applies to all of its business entities and was made voluntarily, based on strategic business considerations.

Genesis has reassured its clients that any ongoing derivatives positions with GGCI will be honored until their respective expiry dates.

In recent weeks, Genesis has been actively introducing strategic changes and scaling back services, aiming to streamline operations and focus on core areas of expertise.

This strategic realignment by Genesis, halting digital asset derivatives trading through GGCI, aligns with the company’s broader mission.

Additionally, the firm has provided full support to its 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 specific reasons behind their decision, market observers speculate that factors such as regulatory uncertainties, market volatility, or shifting client demands may have influenced their strategic realignment.

Genesis and Digital Currency Group Legal Dispute

As reported by Reuters, Digital Currency Group (DCG) is currently facing legal action from Genesis Global Capital as both parties negotiate the repayment of over $610 million in loans that matured in May.

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 claims that retrieving the unpaid sums would significantly benefit its bankruptcy estate while alleging that DCG wrongfully possesses the funds.

However, Genesis has indicated ongoing discussions with DCG for partial repayment and intends to drop the lawsuits if a settlement is reached.

As per court documents, DCG owes over $1.7 billion to Genesis and other debtors. On August 29, Genesis announced agreeing in principle with DCG and unsecured creditors.

Under the proposed agreement, DCG would pay $275 million and acquire $1.16 billion in new credit facilities maturing in two or seven years to fulfill its obligations.

In response to the lawsuit, DCG has stated its intention to file a settlement with the bankruptcy court soon, aiming to initiate the distribution of funds to creditors and progress towards significant recovery for the company’s creditors.

Genesis, established by Barry Silbert in 2013, filed for Chapter 11 bankruptcy in January after halting withdrawals. The bankruptcy filing followed substantial loans provided by Genesis to hedge funds Three Arrows Capital and Alameda Research, both of which also filed for bankruptcy in 2022.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.