Genesis provides trading, lending and custody services for digital assets owned by DCG; which also owns crypto news site CoinDesk and the Winklevoss twins’ cryptocurrency exchange Gemini.
In November, this company’s sudden stop to redemptions sent shockwaves through the industry and raised serious fears of financial contagion. Reportedly owing millions in customer debts and trying to stay solvent.
Getting Started
Genesis Mining offers an outstanding service for cryptocurrency mining capacities management. Their unique feature allows users to manually divide power among cryptocurrencies depending on profitability indicators – helping users quickly respond to changes and maximize profits.
As new miners may not wish to incur the high expenses associated with setting up their own mining operation – such as purchasing expensive mining hardware and electricity costs – this option may be more suitable.
Genesis Crypto Lender, one of the few to hold a BitLicense from New York state, provides institutional investors with an all-in-one solution for investing substantial sums of capital in crypto markets – offering discreet trading, large loans on fixed terms at reduced interest rates, custody services and screening to meet KYC/AML regulations. Unfortunately their services are only open to accredited investors with annual income exceeding $200,000 or $300k combined (depending on marital status), net worths exceeding $1 million or securities licenses.
Trading
To trade with Genesis, you must be an accredited investor. To see if you meet this criterion, visit Genesis Global Trading website and enter your details on its front page. Once approved, additional documentation regarding your finances must be provided as proof.
Genesis Lending Arm has taken steps in response to recent crypto market instability and the collapse of exchange FTX by freezing redemptions and new loan originations processes, and now owes $575 Million in debts to creditors.
According to the firm’s most recent quarterly report, bitcoin (BTC, -2.40%) loans declined as a portion of their overall portfolio year-on-year while ether (ETH, -3.00%) loans increased due to customer demand using these ETH loans for liquidity mining on DeFi protocols like Compound, Aave and Uniswap – driving this spike up. Furthermore, their other loan assets also saw increases.
Lending
Genesis does not charge users any management or commission fees but makes money through trade spreads. Users depositing crypto with Genesis may then request a quote on their preferred price to buy or sell that cryptocurrency; final negotiation and confirmation occur during trade.
CoinDesk parent Digital Currency Group owns and operates this firm, with active loans amounting to $5.2 billion at the end of third quarter. Among their most active borrowers were hedge funds, quantitative trading firms and crypto exchanges as well as crypto operating companies like bitcoin ATM companies.
Genesis should – like traditional banks – collateralize its loans to lower risk. Yet according to three people familiar with its business, Genesis sometimes extended more loans than were insured with collateral. This increased risk, since extreme market drops can trigger margin calls, forcing lenders to take back cryptocurrency investments which in turn causes investors to lose their investments.
Custody
Genesis offers segregated multi-asset cold storage as an integral component of their plan to become the go-to place for crypto investors, offering investment execution services and lending as well.
Genesis provided loans to various firms, including hedge funds, quant trading businesses and exchanges. Furthermore, Gemini Earn allowed users to generate yield by lending out their crypto assets for interest earnings.
However, Genesis parent Digital Currency Group recently made public a filing that indicates it will soon have to pay back creditors. According to this filing, Genesis Global Capital equity will be given over to another company so it can sell both companies simultaneously and then pay clients back.
The acquisition demonstrates how cryptocurrency custodians are becoming full-service providers, offering lending, storage, and insurance products. BitGo also expanded into full service provision by purchasing Volt’s custody services from Genesis.
