Digital Currency Group (DCG) has announced the closure of its prime brokerage subsidiary, TradeBlock, citing the challenging regulatory environment for cryptocurrencies in the United States and the overall state of the economy. Effective May 31, TradeBlock, led by Breanne Madigan, will commence the process of winding down its operations.
According to a report from Bloomberg on May 25, a spokesperson for DCG stated, “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.”
This move comes after DCG had previously shut down its wealth-management division HQ in January 2023. The conglomerate and its portfolio of companies have faced significant challenges during the prolonged crypto winter. They experienced layoffs of over 500 employees due to the impact of FTX’s collapse and the downturn in the crypto market.
In 2022, DCG also reported losses exceeding $1 billion, primarily influenced by the downfall of the cryptocurrency hedge fund Three Arrows Capital (3AC). Furthermore, DCG recently missed a $630 million debt payment owed to Gemini, a troubled cryptocurrency exchange. Gemini is considering a forbearance option, which would allow DCG to temporarily reduce or halt payments with the expectation of resuming them later. However, Gemini’s decision on forbearance depends on DCG’s willingness to engage in good-faith negotiations for a consensual agreement.
