Katherine Ross

Genesis Global Trading (GGT) will shutter its crypto spot trading operations in September.



A spokesperson for Genesis, which is a subsidiary of Barry Silbert’s Digital Currency Group, said that the decision was made “voluntarily and for business reasons.”



“We are working closely with regulatory authorities to coordinate an orderly discontinuation of services,” the spokesperson continued.&nbsp;



GGT is based in New York and offers over-the-counter market-making services in digital assets. According to the <a href="https://genesistrading.com/legal/regulatory-information">website</a>, it’s licensed with the New York Department of Financial Services, the Financial Industry Regulatory Authority, and the <a href="https://blockworks.co/tag/sec">US Securities and Exchange Commission</a>.



However, both spot and derivatives trading through GGC International Limited will still be “operational.”&nbsp;



GGC is a British Islands company “wholly owned by Genesis Bermuda Holdco Limited,” according to the Genesis Trading site.



Genesis Trading released a quarterly <a href="https://genesistrading.com/insights/quarterly-reports">report</a> for the second quarter of this year, noting that “spot market liquidity” had been “suffering” and that, with “spot order book depth chronically flagging, it has become increasingly apparent that a significant portion of the future growth of crypto volumes will be in derivatives.”



Though it also noted that “the buy-side continues to trade opportunistically in the spot and derivatives market, specifically with a tilt toward exchange-cleared venues and a selective approach to OTC activity with reliable and trusted partners.”



Another Genesis-linked company, Genesis Global Holdco, filed for <a href="https://blockworks.co/tag/bankruptcy">bankruptcy</a> at the start of the year, though GGT was able to avoid the bankruptcy. All companies are indirectly linked back to DCG. 



<a href="http://blockworks.co/tag/dcg">DCG</a>, a venture capital firm, has encountered its fair share of hurdles this year. It <a href="https://blockworks.co/news/dcg-genesis-gemini-debt">missed a $630 million debt payment</a> to Gemini back in May and <a href="https://blockworks.co/news/gemini-suit-accuses-dcg-silbert-of-aiding-and-abetting-fraud">now faces a lawsuit from Gemini</a>.



Gemini alleged both DCG and Silbert “engaged in a fraudulent scheme to induce a variety of depositors, including Gemini users,” in order to “lend huge amounts of cryptocurrency and US Dollars to DCG’s subsidiary Genesis Global Capital.”



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Genesis Global Trading to wind down crypto spot trading

Ben Strack

<div id="highlights-block_621e941905ff3" class="highlights">
 <ul>
 <li>Offerings will allow traders to hedge market-moving events with greater precision, according to CME Group’s global head of equity and foreign exchange products</li>
 <li>CME Group began offering micro bitcoin and micro ether futures contracts last year</li>
 </ul>
 
</div>



Derivatives exchange CME Group is set to roll out options on micro bitcoin and ether futures this month in a move to give more traders exposure to such instruments with nominal capital.



The options contracts, set to launch March 28, will be one-tenth the size of their underlying tokens. CME introduced bitcoin futures contracts, sized at five bitcoin, in 2020.



Futures require the buyer to purchase an asset at a certain date, while options give an investor the right, but not the obligation, to buy or sell an asset before the contract expires.



CME Group began offering bitcoin futures contracts in 2017 and <a href="https://cms.blockworks.co/cme-group-to-launch-cash-settled-micro-bitcoin-futures/" target="_blank" rel="noreferrer noopener">launched</a> cash-settled micro bitcoin futures contracts worth one-tenth of one bitcoin last year. The derivatives marketplace <a href="https://cms.blockworks.co/cme-group-plots-launch-of-micro-ether-futures/" target="_blank" rel="noreferrer noopener">moved in November</a> to add micro ether futures as liquidity in ether futures grew steadily with investors.&nbsp;



About 5.2 million micro bitcoin and micro ether futures contracts have changed hands in less than a year, according to Tim McCourt, CME Group’s global head of equity and foreign exchange products.



“Building on the strength and liquidity of the underlying contracts, our micro-sized options will enable traders of all sizes to efficiently hedge market-moving events with greater precision and flexibility or fine-tune their cryptocurrency market exposure,” McCourt told Blockworks in an email.



As traders favor short-dated options to manage risk, according to McCourt, the launch will feature Monday, Wednesday and Friday weekly expiries for micro crypto options.



Executives at Genesis Global Trading, Cumberland and Akuna Digital Assets said their firms will provide liquidity.



&#8220;We believe that options on these contracts will allow existing market participants greater flexibility when seeking cost-efficient exposure as well as opening the market to new participants who prefer the more granular sizing,&#8221; Akuna CEO John Harris said in a statement.



The launch comes after CME Group launched two new reference rates for bitcoin and ether Monday that provide a daily reference rate of the US dollar price of the two digital assets, published at 4 pm ET.



“We’re continually talking with and listening to clients and market participants about new ways to help them manage cryptocurrency risk,” McCourt said, declining to share specific future crypto products the company has in the works.



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