Hours after the news broke out that Genesis Global has fired 30% of its staff, parent company digital currency Group (DCG) has decided to close its wealth division. This is the latest sign of trouble as the company has been facing a severe liquidity crisis at Genesis following the FTX collapse.
Dubbed HQ Digital, Digital Currency Group (DCG) has shuttered its wealth management division, a company spokesperson confirmed. The Information was the first to report the news. In an email statement, the DCG spokesperson noted:
“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, effective January 31. We’re proud of the work that the team has done and look forward to potentially revisiting the project in the future.”
The Digital Currency Group has been facing severe challenges for some of its biggest subsidiaries following the collapse of the crypto exchange FTX.
DCG's Genesis Faces Huge Trouble
Last month, the lending unit of DCG subsidiary Genesis Global announced pausing their withdrawals suddenly as they were facing a huge liquidity issue. Since then, Genesis has been trying to raise fresh capital for its lending unit.
Crypto exchange Gemini has been recently caught in the crossfire since Genesis decided to suspend withdrawals. As per reports, Genesis holds around a staggering $1 billion worth of funds for crypto exchange Genesis.
Gemini co-founder Cameron Winklevoss wrote an open letter to DCG chief Barry Silbert noting that 34,000 customers of Gemini Earn products are waiting for withdrawals to resume. Over the frozen funds, he also accused Silbert of engaging in ‘bad faith stalling tactics’.
However, Digital Currency Group CEO Barry Silbert has responded to this noting: "DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response".
As per Silbert, Genesis functions independently and DCG is not responsible for its actions.