Yesterday, DCG Group, a conglomerate that runs Genesis, Grayscale and the headquarters of the wealth management service, announced a 30% workforce reduction as the shadow of bankruptcy looms over the battered cryptocurrency broker.
DCG has been in trouble for a while now, with associated services distancing itself from any possible consequences.
Unfortunately, it seems that problems are piling up in DCG as one division after another begins to shut down.
closed for winter
The worrying announcement about Genesis’ workforce reduction and possible bankruptcy was soon followed by another about sister company “HQ”.
According to a company spokesperson, the headquarters will stop all activity from January 31, although it will consider reopening the branch in the future.
The closure of the headquarters is attributed to 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 hurdles for the industry, we have made the decision to close headquarters effective January 31, 2023. We are proud of the work the team has done and look forward to revisit the project in the future.”
The first cracks began to show in November when DCG CEO Barry Silbert warned investors that 2022 revenue will be lower than expected. At the time, Genesis, which had already laid off 20% of its workforce in August, owed parent company DCG about $575 million.
To further compound the dire financial position Genesis and DCG found themselves in, only Bitvavo claimed he was owed around $300 million by DCG, who allegedly shifted the blame to Genesis alone.
Investors and partners were stumped
As reported by The Information, HQ was still managing approximately $3.5 billion worth of assets in December, despite the crypto winter. As a result, partners and investors were reportedly stunned by the decision, claiming it came out completely out of left field.
Although the DCG group hints at the implosion of 3AC and FTX as being to blame for their own problems, claiming their assets were lost when withdrawals from the two defunct crypto platforms were halted, the responsibility for liquidity problems should never be shifted to someone else. If proper due diligence had been carried out, the situation at DCG would likely be very different.
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This post DCG’s Wealth Management Division Closes Hours After Genesis Announced Layoffs: Report
was published first on https://cryptopotato.com/dcg-wealth-management-division-shuts-down-hours-after-genesis-announced-layoffs-report/