Digital Currency Group (DCG), the crypto conglomerate that owns beleaguered crypto broker Genesis and digital asset supervisor Grayscale, confirmed Thursday that it is shuttering HQ, its wealth administration division, as initially noted by The Information.
“Due to the point out of the broader economic environment and extended crypto winter presenting considerable headwinds to the market, we produced the decision to wind down HQ, effective January 31, 2023,” a DCG spokesperson told Decrypt. “We’re very pleased of the function that the group has completed and seem ahead to likely revisiting the challenge in the future.”
The news comes the similar working day that Genesis announced a enormous wave of layoffs—30% of its staff—as DCG and its subsidiaries reel from the contagion spread by crypto trade FTX’s implosion in November.
HQ, which managed funds for crypto entrepreneurs and traders, oversaw some $3.5 billion value of property as of December, in accordance to The Info. The company’s associates had been reportedly blindsided by the conclusion.
In November, as the crypto marketplace attempted to evaluate the extent of the seismic hurt induced by FTX’s collapse, DCG CEO Barry Silbert reassured traders that the company faced no imminent threat, inspite of the actuality it owed its own subsidiary, Genesis, $575 million. Genesis suspended withdrawals in the days next FTX’s personal bankruptcy thanks to liquidity concerns, which have nevertheless to resume.
Liquidity crunches may perhaps not be isolated to DCG’s subsidiaries. A creditor committee investigating Genesis’ economic woes intimated in December that DCG may be experiencing its possess liquidity difficulties. Dutch cryptocurrency trade Bitvavo alleged the similar that thirty day period that DCG owed the trade practically $300 million, which it appeared incapable of having to pay back again. DCG retorted that the subject was Genesis’ liability, not DCG’s.
That fine line distinguishing DCG’s balance from the woes of its troubled subsidiaries appears to be fraying.
On Monday, Cameron and Tyler Winklevoss, founders of crypto trade Gemini, wrote a blistering open up letter to Barry Silbert on Monday, accusing DCG and Genesis of utilizing “bad-religion stall tactics” to prevent repaying their money owed. Gemini end users are reportedly owed some $900 million, and the letter claimed that DCG owes Gemini a whopping $1.675 billion, significantly a lot more than beforehand disclosed by Silbert.
Silbert responded by stating that the determine was inaccurate, retaining that DCG is in correctly great money standing.
Thursday’s situations may possibly connect with that assertion more into dilemma.
In addition to HQ, Genesis, and Grayscale, DCG also owns crypto information web-site CoinDesk, bitcoin mining advisory company Foundry, crypto exchange Luno, and conclude-to-stop crypto investing platform TradeBlock.