Digital Currency Group (DCG) is shutting down its wealth management subsidiary HQ Digital, The Information reported on Jan. 5, citing an internal memo.
According to the report, HQ Digital halted operations on January 2; it was launched in June 2022 and ran for just over half a year.
The article’s author, Kate Clark, later published a statement from a DCG spokesperson, who stated that HQ Digital would be shutting down due to the “broader economic environment” and “prolonged crypto winter.”
The spokesperson also said that DCG could possibly reactivate the subsidiary in the future.
The original report called HQ Digital “collateral damage in the FTX implosion,” likely referring to problems at another DGC subsidiary, Genesis Global Capital.
Genesis halted withdrawals and loan repayments after the FTX collapse in November. That decision also affected Gemini Earn, an interest-earning service offered in partnership with the Gemini cryptocurrency exchange.
On January 5, Genesis laid off 30% of its staff as reports suggested the company is exploring a potential bankruptcy filing.
Genesis has denied exposure to FTX’s FTT token and stated that it does not have a lending relationship with FTX. However, he admitted to having $175 million in FTX.
DCG also owns many other cryptocurrency companies, including news site CoinDesk, asset manager Grayscale, mining and consulting company Foundry, cryptocurrency wallet company Luno, and institutional trading API service TradeBlock.
Of these companies, only Luno has been affected so far, having discontinued interest-bearing wallets in November. Whether the other subsidiaries are at risk remains to be seen.
This post Genesis owner Digital Currency Group closes wealth management subsidiary
was published first on https://cryptoslate.com/genesis-parent-dcg-shuts-down-wealth-management-subsidiary/
