On May 31, TradeBlock, a trading platform with a focus on institutional investors, which is part of the Digital Currency Group (DCG) holding, will begin the procedure for curtailing its activities.
Barry Silbert’s crypto conglomerate, Digital Currency Group, is shuttering its TradeBlock institutional trading platform https://t.co/duE4YnknrR
— Bloomberg Crypto (@crypto) May 25, 2023
As reasons, the company cited the state of the economy as a whole and the uncertain regulatory environment for digital assets in the United States.
The decision was made four months after the closure of a subsidiary of the HQ Digital holding, which specializes in asset management. At the time, the company cited the “prolonged crypto winter and the economic situation.”
In January 2023, the Luno cryptocurrency exchange, which is part of the holding, laid off 330 specialists. Together with other divisions, the layoffs affected more than 500 employees.
At the end of 2022, Digital Currency Group recorded a loss of $1.1 billion. The main reason was the problems of the subsidiary crypto-lending platform Genesis Global Capital.
On November 16, 2022, the division froze the withdrawal of funds and the issuance of new loans. The firm cited “increased demand” from customers following the collapse of FTX.
The source of the difficulties was the collapse of the hedge fund 3AC in July of the same year. The latter failed to fulfill its obligations to Genesis Global Capital for $2.36 billion. The firm was supported by the Digital Currency Group.
In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceed $3 billion. This amount includes claims from clients of the Gemini exchange for $900 million.
In May, DCG defaulted on a $630 million payment to compensate users of Gemini Earn.
Recall that in January SEC and the US Department of Justice began to study the nature of the interaction between the Digital Currency Group and Genesis Global Capital, according to Bloomberg.
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