By James Davis
On Thursday, Digital Currency Group, the owner of digital asset manager Grayscale and crypto broker Genesis, confirmed that it is winding up operations of its wealth management subsidiary, HQ. The Information, a finance-focused website, was the first to deliver an unconfirmed report.
Digital Currency Group blames the harsh economic environment and the ongoing crypto winter as the cause of the HQ shutdown. As a result, the wealth manager will cease to operate at the end of January. However, the Group’s spokesperson said they might revisit the project in the coming years.
Digital Currency Group’s Crypto Broker Announces Plans to Fire Part of Its Staff
The HQ shutdown news came after Digital Currency Group’s crypto broker Genesis revealed plans to conduct massive layoffs. Genesis seeks to send about 30% of its staff home to avoid further harm from the industry contagion caused by FTX’s downfall last year.
In November 2022, as the entire crypto space attempted to figure out the magnitude of the damage caused by the collapse of FTX, Barry Silbert, the Digital Currency Group CEO, reassured investors that the firm faced no looming threat.
Silbert’s statement came amid Digital Currency Group still owing Genesis over $550 million. The crypto broker suspended withdrawals a few days after FTX filed for bankruptcy due to liquidity problems. Furthermore, Genesis is yet to resume withdrawals.
Digital Currency Group’s subsidiaries are not spared in terms of liquidity issues. According to a creditor committee probing Genesis’ financial troubles, the broker’s parent firm is facing a massive liquidity crunch.
Digital Currency Group’s Subsidiaries Fail to Repay Their Debts
Bitvavo, a Dutch crypto exchange, alleges the same that Digital Currency Group owes the exchange nearly $290 million, and it seems incapable of paying back. However, the Group has denied the allegation, claiming it’s Genesis’ liability.
In addition, the Winklevoss twins, who own Gemini, a crypto exchange, wrote an open letter to Silbert on Monday, calling out his firms for what the twins termed bad-faith stall tactics to evade fulfilling their debt obligations. According to the Gemini owners, the exchange’s Earn product users are owed over $900 million.