Genesis parent company Digital Currency Group shuts down wealth management division, citing crypto winter

Genesis Capital and its owner Digital Currency Group have been making headlines over the last few days for multiple reasons. The latest is born out of the FTX implosion, which has not only left companies struggling to survive but also pushed many to the point of devastation.

Digital Currency Group takes another hit

Digital Currency Group announced on Thursday that the company would be shutting down its wealth management division known as HQ. According to the company, the FTX-induced crypto winter is to be blamed for this development. However, Digital Currency Group is not all done with the firm as it said in a statement,

"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. We're proud of the work that the team has done and look forward to potentially revisiting the project in the future."

This is the second biggest blow to Digital Currency Group in two months as Genesis Capital is also struggling to remain afloat over the last couple of weeks, following the halt on withdrawals from its platform in November. Furthermore, the company's Global Trading division is also reducing its manpower, having laid off about 30% of its workforce this week.

To make matters even more challenging for Digital Currency Group, its CEO Barry Silbert faced criticism from Gemini founder Cameron Winklevoss this week. In an open letter on Monday, Winklevoss called on the executive and bashed the company for failing to reach a resolution to return the money that Genesis owes to Gemini Earn users.

Digital Currency Group's head was seen refuting these allegations, stating the company was cooperating. However, Winklevoss, towards the end of the letter, gave a deadline of January 8 to Digital Currency Group to solve this problem.

Crypto winter has not gone away

Bringing down more and more companies, the crypto winter has left the market hurt and aching for recovery. The collapse of FTX further fueled the fire, resulting in the crypto market losing over $255 billion in November 2022, then another $75 billion in December 2022, eliminating all chances of recovery last year. 

Total crypto market capitalization

At the time of writing, the total crypto market capitalization could be seen standing at $776 billion, almost 23% below its pre-FTX collapse levels of $1 trillion. The possibilities of recovery aren't obvious either since any recovery made is invalidated soon after.