DCG Shuts Down Brokerage Unit TradeBlock

VC conglomerate Digital Currency Group (DCG) is shutting down TradeBlock, its main brokerage and trading unit. They cite adverse economic conditions and the hostile regulatory environment for digital assets and crypto in the United States, Bloomberg reported on May 25.

The unit will start closing down on May 31

TradeBlock, which is helmed by Breanne Madigan, will start the official process of closing down at the end of the month.

A spokesperson told Bloomberg:

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.

DCG closed down its wealth management unit

Like many other digital asset firms, DCG and its subsidiaries have faced great challenges over the prolonged crypto bear market. DCG closed down its main wealth management unit at the beginning of this year.

Mass layoffs, losses exceed $1B

After FTX collapsed, DCG companies laid off more than 500 staff in total as a result of contagion. In 2022, the VC conglomerate’s losses exceeded $1 billion. Most of those came from the downfall of Three Arrows Capital, a cryptocurrency hedge fund.

A bevy of creditors led by Gemini

More recently, DCG missed a $630 million repayment to the crypto exchange Gemini, its main creditor. The exchange, which is in trouble itself, announced it might consider a forbearance option in relation to its debtor. That’s a temporary suspension or reduction in the payment of debts or obligations owed.

Authorities probe Genesis and DCG transfers

As Bankless Times reported in January, officials with the US SEC and the Department of Justice launched a probe into transfers between DCG and its subsidiary Genesis. At the time, the authorities were in the early stages of inquiry. The DoJ had asked for documents and questioned representatives of Genesis and DCG.