Genesis owner Digital Currency Group shuts down wealth management subsidiary
DCG is shutting down HQ Digital after less than a year of operation.
Digital Currency Group (DCG) is shutting down its wealth management subsidiary HQ Digital, The Information reported Jan. 5, citing an internal memo.
According to the report, HQ Digital halted operations on Jan. 2; it was launched in June 2022 and operated for just over half a year.
The author of the article, Kate Clark, later published a statement from a DCG spokesperson, which stated that HQ Digital would shut down due to the “broader economic environment” and the “prolonged crypto winter.”
The spokesperson also said that DCG could possibly revive the subsidiary in the future.
The original report called HQ Digital “collateral damage in the FTX implosion,” likely referring to issues at another DGC subsidiary, Genesis Global Capital.
Genesis halted withdrawals and loan redemptions following FTX’s collapse in November. That decision also impacted Gemini Earn, an interest-bearing service offered in partnership with the crypto exchange Gemini.
On Jan. 5, Genesis laid off 30% of its staff as reports suggested that the firm is exploring a possible bankruptcy filing.
Genesis has denied exposure to FTX’s FTT token and stated that it has no lending relationship with FTX. However, it did admit to holding $175 million at FTX.
DCG also owns numerous other crypto companies including the news site CoinDesk, the asset manager Grayscale, the mining and advisory firm Foundry, the crypto wallet company Luno, and the institutional trading API service TradeBlock.
Of these companies, only Luno has been impacted so far, as it discontinued interest-bearing wallets in November. It remains to be seen whether the other subsidiaries are at risk.