Digital Currency Group closes wealth division amid crypto slump

CRYPTOCURRENCY conglomerate Digital Currency Group (DCG) has closed its wealth-management division, known as HQ, in the latest sign of trouble amid a deep and prolonged slump in the crypto industry.

This comes after the Connecticut-based firm, which controls asset manager Grayscale Investments, among others, dismissed 10 per cent of its staff toward the end of last year. Its brokerage Genesis also eliminated more than 60 positions, or about 30 per cent of its workforce. 

A DCG spokesperson said the company decided to close HQ “due to the state of the broader economic environment and prolonged crypto winter”. They added that these factors presented “significant headwinds to the industry”.

“We’re proud of the work that the team has done, and look forward to potentially revisiting the project in the future.”

DCG has been dealing with changes and challenges in some of its biggest subsidiaries since the sudden collapse of FTX, one of the world’s largest crypto exchanges.

Genesis has warned that it might seek bankruptcy protection. The brokerage tried to raise fresh cash for its lending unit, but some investors approached for the lifeline baulked at the interconnectedness between it and other entities under DCG.

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Earlier this week, Gemini Trust chief executive Cameron Winklevoss accused his counterpart at DCG, Barry Silbert, of “bad faith stall tactics”. He also said Silbert intermingled funds within DCG, and that this left customer assets of some US$900 million needlessly in limbo after FTX fell.

Gemini’s customers have not been able to access funds placed in its lending product, Gemini Earn, which offered investors the potential to generate as much as 8 per cent in interest on their digital coins. It did so by lending the coins to Genesis Global Capital, another company controlled by DCG. 

Winklevoss said more than 340,000 Gemini customers have been affected. He asked Silbert to “publicly commit to working together to solve this problem” by Sunday (Jan 8). He did not say what would happen if no agreement was reached by then. BLOOMBERG