Yesterday, DCG Group – a conglomerate that runs Genesis, Grayscale and the wealth management service headquarters – announced a 30% workforce reduction as the shadow of bankruptcy looms over the battered crypto broker.
DCG has been struggling for some time now, with partner services distancing themselves from any possible fallout.
Unfortunately, it seems like the problems are piling up at the DCG as one division after another begins to fall back.
Closed for winter
About him announcement regarding Genesis’ downsizing and possible bankruptcy was soon followed by another regarding sister company “HQ”.
According to a company spokesperson, HQ will cease all activity from January 31, although it plans to reopen the branch in the future.
HQ’s shutdown is being blamed on the broader financial situation – and, naturally, the ongoing crypto winter.
“Due to the state of the broader economic environment and the prolonged crypto winter presenting significant headwinds for the industry, we have made the decision to close the corporate office, effective January 31, 2023. We are proud of the work done by the team and look forward to possibly revisiting the project in the future.
The first cracks began to show in November when DCG CEO Barry Silbert advised investors that 2022 revenue would be lower than expected. At the time, Genesis – which had already laid off 20% of its workforce in August – owed about $575 million to parent company DCG.
To further aggravate the dire financial situation that Genesis and DCG found themselves in, Bitvavo alone claimed to be owed approximately $300 million by DCG, which allegedly placed the blame on Genesis alone.
Investors and partners left perplexed
As reported per The Information, HQ was still managing around $3.5 billion in assets as recently as December, despite the crypto winter. As a result, partners and investors were reportedly stunned by the decision, saying it came completely out of left field.
Although the DCG Group alludes to the implosion of 3AC and FTX as culprits of its own misfortunes – claiming that its assets were lost when withdrawals from the two defunct crypto platforms were halted – blame for the liquidity issues does not should never be passed on to anyone else. If due diligence had been performed, the situation at DCG would likely be very different.
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