DCG to close down its institutional trading arm amidst a harsh crypto market
|- Digital Currency Group will close down TradeBlock platform by the end of the month, citing the harsh crypto market.
- Only the institutional trading side will close; indexing side of the business owned by DCG subsidiary CoinDesk will remain operational.
- TradeBlock adds to the list of DCG subsidiaries facing issues after Genesis lending arm filed for bankruptcy in January.
Digital Currency Group (DCG) is set to close its institutional trading division, TradeBlock, on May 31 because of the extremities of a harsh cryptocurrency market.
Due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the US, we made the decision to sunset the institutional trading platform side of the business.
Notably, the digital-asset conglomerate has been negotiating with creditors of its bankruptcy lending business, Genesis, before the decision to close down its TradeBlock subsidiary that focused on providing trade execution, pricing, and prime brokerage services to institutional investors.
Digital Currency Group to wind down its institutional trading business
Digital Currency Group is the mother company for many entities, including CoinDesk Inc., the crypto media and events company. Based on this relationship, CoinDesk acquired TradeBlock in 2020 in a private transaction, folding the indexing business into its own and spinning out the remaining operations as the TradeBlock trading platform.
Breanne Madigan, who boasts 15 years’ experience at Goldman Sachs as head of institutional wealth services (Americas), spearheaded DCG’s TradeBlock. Madigan also served as vice president of global constitutional markets at Ripple.
DCG bears the brunt of a deep and prolonged crypto industry slump
The development adds to a January move by DCG to shut down its wealth-management division amid a deep and prolonged slump in the cryptocurrency industry. Under the leadership of Barry Silbert, DCG has continued to endure a wide range of headwinds, most of which were caused by the unexpected implosion of the crypto exchange FTX in November 2022 under the unscrupulous leadership of Sam Bankman-Fried.
In November, DCG’s crypto lending division Genesis Global halted withdrawals before filing for Chapter 11 bankruptcy protection in January. The company owes $3.5 billion to creditors and recently said that it is in discussions with capital providers.
Genesis is also at loggerheads with fellow DCG subsidiary Gemini, with which it formerly offered an Earn product where users should receive interest on their crypto investments. Gemini recently claimed that DCG missed a $630 million payment that was due.
Two other DCG divisions have also suffered the brunt of a difficult bear market. DCG terminated its wealth management subsidiary, HQ Digital, two months before its crypto exchange, Luno, abandoned interest-bearing savings wallets in January.
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