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Digital Currency Group Shuts Institutional Trading Platform, Cites Crypto Crisis

WikiBit 2023-05-26 16:23

Abstract:Digital Currency Group is discontinuing its institutional trading division, TradeBlock, due to challenging conditions in the cryptocurrency market.

  Digital Currency Group (DCG), a prominent digital-asset conglomerate, has announced the closure of its institutional trading division, TradeBlock, attributing the decision to the challenging conditions prevailing in the cryptocurrency market. TradeBlock specialized in offering institutional investors trade execution, pricing, and prime brokerage services. As per Bloomberg's report, DCG plans to wind down its prime brokerage subsidiary, TradeBlock, by the end of this month.

  Prolonged crypto winter season

  Digital Currency Group (DCG) has announced the closure of its institutional trading platform, citing several factors including the broader economic conditions, an extended period of downturn in the crypto market, and the uncertain regulatory landscape for digital assets in the United States. The decision to shut down the institutional trading side of the business follows the earlier closure of DCG's wealth-management division headquarters, which was necessitated by the bankruptcy of Genesis, its lending business.

  Prior to the closure, Digital Currency Group engaged in negotiations with creditors associated with its bankruptcy lending business, Genesis. These discussions played a significant role in the company's decision to shut down its subsidiary, TradeBlock.

  In addition, Digital Currency Group (DCG) disclosed losses surpassing $1 billion in the previous year, stemming from the ripple effect of the FTX collapse and the overall downturn in the cryptocurrency market. Furthermore, DCG's cryptocurrency lending division, Genesis Global, filed for Chapter 11 bankruptcy protection in January.

  DCG misses $630 million loan payment to Gemini

  Gemini, the cryptocurrency company owned by the Winklevoss twins, extended a $900 million loan to Genesis, a subsidiary of Digital Currency Group (DCG) which is now defunct. Following DCG's failure to make a $630 million loan payment, Gemini and other creditors are contemplating granting forbearance to DCG to avoid a default. Gemini previously cautioned that if DCG misses this payment, it risks default.

  Forbearance would allow DCG to temporarily reduce or suspend payments, with the intention of resuming them later. Gemini emphasized that the decision to grant forbearance will depend, in part, on whether the parties believe DCG will engage in sincere negotiations for a mutually agreeable resolution.

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