The parent of Grayscale and Genesis – Digital Currency Group to shut down its wealth management division by Jan. 31.
The crypto winter swallowed yet another business as the holiday season ended and 2023 started. The Digital Currency Group, a parent company of Genesis and Grayscale Bitcoin Trust to wrap up its wealth management business called HQ from Jan. 31. It had over $3.5 billion in assets as of Dec. 2022.
Digital Currency Group Kneels to Prolonged Crypto Winter
The FTX collapse, global macroeconomic conditions, and crypto winter have immensely challenged the Digital Currency Group.
Its Spokesperson said, “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. We’re proud of the work that the team has done and look forward to potentially revisiting the project in the future.”
The Information first reported the shutdown of HQ. The frustrated community calls HQ a wealth destruction business.
Genesis Battle the Pile of Problems With Layoffs
The problems with Genesis intensified when Cameron Winklevoss, the CEO of Gemini, wrote an open letter to Barry Silbert, the CEO of Digital Currency Group, asking him to solve Gemini Earn users’ problems by Jan. 8. After the collapse of FTX, Genesis got into a liquidity crunch and had to pause withdrawals. Gemini Earn’s customers’ funds worth over $900 million are stuck with Genesis.
As Jan. 8 approaches, the Digital Currency Group is taking severe methods for cost-cutting. Along with shutting down HQ, the Digital Currency Group is to lay off 30% of crypto lender Genesis’s staff, according to the Wall Street Journal.
As per a Genesis spokeswoman, the layoffs are part of the effort to move the business forward. She says, “As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally. These measures are part of our ongoing efforts to move our business forward.”
Genesis is also considering a Chapter 11 Filing with the consultation of a New York-based investment bank, Moelis & Co.
2023 has been rough so far. Along with Genesis, crypto exchange – Huobi revealed to lay off 20% of its staff. Most recently, the tech giant Amazon also announced to layoff estimated 18,000 employees. There are also rumors about Gate.io cutting back staff.
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BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.