BlocksInform
Yesterday, DCG, a conglomerate which runs Genesis, Grayscale, Wealth Management Head Office announced a 30% reduction in staffing while the distressed crypto broker faces the shadow of bankruptcy.
DCG has been in trouble for a while now, with partnered services distancing themselves from any possible fallout.
Unfortunately, it appears that issues are accumulating at the DCG level as divisions start to collapse.
Shut down for the winter.
The concerning announcement regarding Genesis’s workforce reduction and possible bankruptcy was soon followed by another one regarding sister company “HQ.”
According to a spokesperson for the company, HQ will be halting all activity as of January 31, although it will consider re-opening the branch in the future.
The closure of headquarters is due to the overall fiscal situation and, of course, the crypto winter.
"The state of the overall economic environment and the prolonged winter of cryptography means that the industry is facing significant headwinds, We've made a decision to close down the headquarters, from 31 Jan, 2023. We are proud of the team's work and look forward to reviewing the project going forward."
The first cracks began to appear in November when DCG CEO Barry Silbert informed investors that 2022 revenues would fall short of expectations. At that time, Genesis, which had already laid off 20% of its employees in August, owed DCG's parent company approximately $575 million.
To make the dreadful financial situation even worse Genesis and DCG were, Bitvavo alone reported being indebted to DCG of approximately $300 million, that would have blamed Genesis on its own.
Investors and partners continued to wonder.
As reported by The Information, HQ was still managing about $3.5 billion worth of assets as recently as December, in spite of the crypto winter. Therefore, the partners and investors would have been shocked by the decision, saying that it was completely out of left field.
Though the dcg group suggests that 3ac and ftx implosion as Responsible for one's own misfortunes – claiming that his assets were lost when the withdrawals of the two deceased crypto platforms were stopped – liquidity liability should never be transferred to another person. If appropriate due diligence had been exercised, DCG's situation would likely be quite different.
