Digital Currency Group Is All Set To Shut Down Its TradeBlock
Digital Currency Group (DCG), a venture capital (VC) company based in New York, has made an exclusive announcement. The company that offers services and investments to crypto entities is reportedly shutting down its chief brokerage subsidiary forum named TradeBlock. On the 25th of May, the reports pointed out that the firm will soon shut down its services.
DCG Announces the Closure of Its Brokerage Arm TradeBlock
The platform is run by Breanne Madigan (the person who formerly operated under Goldman Sachs for up to fifteen years). The procedure for the platform’s closure will start specifically at the denouement of this month. TradeBlock is devoted to offering services related to prime brokerage and trade execution only to organizational investors.
The platform was bought by CoinDesk which is a crypto news platform under the ownership of DCG. Digital Currency Group bought it via an unrevealed financial transfer back in 2020. After the acquisition, the media house included the indexing services of TradeBlock in its functions. On the other hand, the rest of the characteristics of the platform were transacted into TradeBlock.
Unluckily, DCG has determined to stop the activities done by the organizational trading company after the provision of services for 3 years. The cause of the respective closure was the prevailing conditions within the financial world as well as the lengthened crypto winter. These things put a great impact on the whole market.
The platform additionally blamed the regulatory scenario covering the current economy within the US to be a noteworthy contributor to the whole business failure. A spokesperson from Bloomberg stated that, because of the condition of the wider economy and extended crypto bear market. As per the spokesperson, the difficult regulatory surroundings within the United States also played a vital role in compelling the platform to stop the respective subsidiary.
DCG Blames Crypto Bear Market and Regulatory Challenges for Closure
DCG, in addition to its range of firms, has gone through several financial issues in the previous year. The respective financial restrictions emerged partly from the crash of FTX (the now-bankrupt crypto exchange) back in November 2022. This was the event that pushed several entities into bankruptcy. The respective platforms also include BlockFi.
The exclusive closure is categorized as the 2nd business to be shut down by the platform this year. Back in January this year, DCG declared its forum HQ Digital’s liquidation.
While supporting its decision, the platform pointed toward the puzzling economic situations. The VC platform has decreased a great part of its employees across many units while attempting to endure the challenging situation.
As a result of that, DCG dropped thirteen percent proportion of its headcount at the beginning of the current year. Luno, one of the sub-branches of the platform, also decreased up to thirty-five percent of its employees in January. In this respect, it cut down nearly 330 job postings. After that, DCG’s crypto brokerage company Genesis also followed suit.
Genesis went through a liquidity crisis leading to a suspension of withdrawals, deposits, and exclusive loan originations. The respective move is witnessed after it remained unsuccessful to collect almost $1B from investors for supporting its business.
In recent incidents, DCG took loans of several million from Genesis in 2022. The repayment of the funds was due in May this year. Nonetheless, DCG has not been up to the mark to fulfill the loan agreement.
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