Digital Currency Group (DCG) is a crypto holding company. Among other things, it owns the lender Genesis Trading and an asset manager Grayscale. It announced the shuttering of its HQ Digital asset management business. Given that the firm had $3.5 billion in total assets in December, this fuels fresh concerns among the bitcoin and crypto community.
According to a leaked memo, HQ Digital is closing because of the industry’s general economic situation and the crypto winter’s “hardy weather.” The project may be revisited in the future by the company. This is a newly created DCG subsidiary.
The move reportedly blindsided the company’s partners. Surprisingly, DCG announced large layoffs at Genesis Trading, amounting to 30% of its workforce, on the same day.
It’s also worth noting that the shutdown began as early as January 2, according to the study. Many altcoins owned by Barry Silbert’s business saw a massive sell-off and price decreases near the end of last year. This sparked even more interest, with speculation that DCG CEO Barry Silbert would sell his stocks on the open market.
Fears Over DCG Spill Into the Broader Bitcoin Market
The news is likely to exacerbate worries that DCG and Grayscale might go bankrupt for the time being, spurring further panic in the crypto market. The move may, however, be seen in the light of Barry Silbert’s late-last-year corporate restructuring of DCG.
Meanwhile, Barry Silbert’s pressure is increasing. Cameron Winklevoss is a Gemini founder. He accused Silbert of stalling and gave him a January 8 deadline to return the $900 million in Gemini Earn customer funds. The statement came in an open letter released earlier this week.
Valkyrie Investments have also approached DCG. It announced the establishment of an opportunistic fund to take advantage of Grayscale Bitcoin Trust discounts. In addition, it offered to become the new sponsor and manager of Grayscale Bitcoin Trust (GBTC). Fir Tree, a $3.5 billion asset management company, sued DCG.
DCG appears to be in a runniness, with Genesis suspending redemptions and new loans after FTX collapsed, causing a liquidity crisis.
