Digital Currency Group (DCG), the parent company of Genesis, has closed its wealth management division named HQ due to the ongoing slump in the cryptocurrency industry and challenging economic conditions, as reported by The Information.
DCG confirmed the closure in an email stating that the division would close its doors on January 31st. The DCG representative said:
Due the state of the broader economic environment and prolonged crypto winter presenting significant headwinds to the industry, we made the decision to wind down HQ, effective January 31st.
DCG and its subsidiary Genesis are facing challenges following the recent collapse of major crypto exchange FTX. Genesis has been seeking additional funding for its lending unit, but some investors have been hesitant due to its connections to other entities within DCG.
Genesis Cut Headcount By 30%
Genesis Trading, the crypto lending arm of Digital Currency Group (DCG), has reportedly cut 30% of its workforce due to financial difficulties and the threat of bankruptcy.
The company, which is led by Barry Silbert and includes Grayscale Bitcoin Trust and mining company Foundry, has already laid off 20% of its employees and replaced its CEO.
According to the anonymous source—who requested anonymity since the figures are private—about 60 positions were cut. There are now about 145 employees at the company.
The fresh round of cuts comes after the market turmoil of 2022 and the bankruptcy of Three Arrows Capital, as well as the collapse of crypto exchange FTX and hedge fund Alameda Research, both of which were major clients of Genesis.
After FTX filed for bankruptcy protection, the company hired bankruptcy attorneys, requested a $1 billion emergency loan, and stopped all redemptions from clients, as per a report by The Wall Street Journal.
Due to the redemption freeze, Silbert has received criticism. Earlier this week, as reported by TronWeekly, CEO Cameron Winklevoss of crypto exchange Gemini, a Genesis client, accused Silbert of “bad faith” tactics.
Winklevoss has asked Silbert to publicly commit to finding a solution to the current problem by January 8th, 2023, and to treat the $1.1 billion promissory note as an obligation to pay $1.1 billion.
