DCG announced on Thursday the closure of its prime brokerage subsidiary TradeBlock. The company cites broad economic concerns and the uncertain regulatory climate in the US.
Digital Currency Group (DCG) announced on Thursday that it would officially start the process of shutting down its institutional trading platform on May 31, Bloomberg reports.
Barry Silbert’s crypto conglomerate, Digital Currency Group, is shuttering its TradeBlock institutional trading platform https://t.co/duE4YnknrR
— Bloomberg Crypto (@crypto) May 25, 2023
A spokesperson for the venture capital conglomerate told Bloomberg that concerns over the broader economic climate and an uncertain regulatory environment for cryptocurrencies in the US drove the decision to shutter TradeBlock’s operations.
Due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the US, we made the decision to sunset the institutional trading platform side of the business.
Challenging Times for DCGEstablished in 2011, the company was acquired by DCG’s crypto-focused media platform CoinDesk in 2021. CoinDesk retained only its index data business which it later rebranded to CoinDesk Indices, Finance Magnates reports.
DCG has been under severe pressure after one of its subsidiaries, Genesis Global Trading, halted customer withdrawals in November and went bankrupt, reportedly owing creditors $3 billion.
The company is further facing pressure over a lending product called “Earn”, which Genesis offered in partnership with crypto exchange Gemini.
Earlier in the week, it was reported that DCG missed a payment concerning a $900 million loan made by Gemini to Genesis. The crypto exchange warned earlier in the month that if DCG could not make the required loan repayment or restructure its debt, the company would be at risk of defaulting on its obligations.
The conglomerate further revealed in its Q4 2022 investor report that it suffered losses worth $1.1 billion due to the collapse of Three Arrows Capital. DCG is reportedly 3AC’s largest creditor, which owes around $2.36 billion in funds.
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