DCG Confirms Shutdown of Prosperity Management Subsidiary HQ

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Electronic Currency Team (DCG), the crypto conglomerate that owns beleaguered crypto broker Genesis and electronic asset supervisor Grayscale, verified Thursday that it is shuttering HQ, its wealth administration division, as first reported by The Info.

“Due to the point out of the broader economic natural environment and prolonged crypto winter season presenting significant headwinds to the business, we created the choice to wind down HQ, productive January 31, 2023,” a DCG spokesperson instructed Decrypt. “We’re very pleased of the operate that the staff has performed and glimpse forward to potentially revisiting the task in the foreseeable future.”

The information will come the exact 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 cash for crypto business owners and buyers, oversaw some $3.5 billion worth of belongings as of December, according to The Data. The company’s companions were reportedly blindsided by the selection.

In November, as the crypto field tried to assess the extent of the seismic hurt induced by FTX’s collapse, DCG CEO Barry Silbert reassured investors that the organization faced no imminent risk, regardless of the simple fact it owed its own subsidiary, Genesis, $575 million. Genesis suspended withdrawals in the days adhering to FTX’s individual bankruptcy because of to liquidity problems, which have nonetheless to resume. 

Liquidity crunches may not be isolated to DCG’s subsidiaries. A creditor committee investigating Genesis’ money woes intimated in December that DCG might be struggling with its personal liquidity difficulties. Dutch cryptocurrency exchange Bitvavo alleged the identical that thirty day period that DCG owed the trade pretty much $300 million, which it appeared incapable of spending back. DCG retorted that the make any difference was Genesis’ liability, not DCG’s. 

That wonderful 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 letter to Barry Silbert on Monday, accusing DCG and Genesis of employing “bad-faith stall tactics” to keep away from repaying their debts. Gemini people are reportedly owed some $900 million, and the letter claimed that DCG owes Gemini a whopping $1.675 billion, substantially a lot more than earlier disclosed by Silbert. 

Silbert responded by indicating that the figure was inaccurate, retaining that DCG is in correctly good financial standing. 

Thursday’s activities may well contact that assertion further more into query. 

In addition to HQ, Genesis, and Grayscale, DCG also owns crypto news internet site CoinDesk, bitcoin mining advisory firm Foundry, crypto exchange Luno, and conclude-to-end crypto buying and selling system TradeBlock. 

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