Genesis Global Trading, a crypto trading firm affiliated with Digital Currency Group (DCG), announced on Tuesday that it will wind down its spot trading operations. The decision comes as the crypto market has been in a prolonged bear market, and as Genesis has been facing financial difficulties.
In a statement, Genesis said that the decision to wind down spot trading was “made voluntarily and for business reasons.” The company said that it will continue to offer other services, such as over-the-counter trading and lending.
Genesis’ spot trading business was relatively small compared to its other businesses. In the second quarter of 2022, spot trading accounted for just 10% of the company’s total trading volume. However, the decision to wind down the business is still a significant blow to Genesis.
Genesis’ financial difficulties have been mounting in recent months. In January, the company’s lending unit filed for bankruptcy protection after suffering losses from the collapse of Three Arrows Capital, a major crypto hedge fund. Genesis has also been facing margin calls from its counterparties.
The decision to wind down spot trading is likely to further strain Genesis’ finances. However, the company said that it is confident that it will be able to continue to operate its other businesses.
The closure of Genesis’ spot trading business is a sign of the challenges facing the crypto industry. The market has been in a bear market for most of 2022, and many crypto companies have been struggling financially. The closure of Genesis’ spot trading business is another reminder that the crypto industry is still in its early stages of development, and that there is still a lot of volatility and risk involved.
In addition to the broader market conditions, Genesis’ decision to wind down spot trading may also be due to regulatory concerns. The crypto industry is under increasing scrutiny from regulators around the world, and Genesis may have decided that it is not worth the hassle of complying with the regulations.
The closure of Genesis’ spot trading business is a setback for the crypto industry, but it is not a death knell. The industry is still growing rapidly, and there are many other companies that offer spot trading services. However, the closure of Genesis is a reminder that the crypto industry is still a risky investment, and that investors should be prepared for volatility and losses.