Venture capital group Digital Currency Group (DCG) is shutting down its prime brokerage subsidiary TradeBlock, citing uncertainty over broader economic conditions and the US cryptocurrency regulatory environment. TradeBlock, led by Breanne Madigan, will officially begin the shutdown process on May 31, according to a Bloomberg report on May 25.
A spokesperson reportedly told Bloomberg: “Due to overall economic conditions and the ongoing cryptocurrency winter, as well as the challenging regulatory environment for digital assets in the United States, we have decided to discontinue the institutional trading platform aspect of our business.” DCG and its portfolio of companies face challenges in the long crypto winter. TradeBlock's closure follows DCG's previous closure of the headquarters of its wealth management division in January 2023.
In previous reports, Cointelegraph reported that DCG has laid off more than 500 employees as the FTX crash and the cryptocurrency downturn spread.
Venture capital group DCG also disclosed losses of more than $1 billion in 2022. The losses were largely attributable to the knock-on effects of the collapse of cryptocurrency hedge fund Three Arrows Capital. In a recent development, DCG defaulted on $630 million in debt to Gemini. Embattled cryptocurrency exchange Gemini, which recently failed to repay $630 million, is said to be considering options for forbearance related to DCG.
The forbearance will allow DCG borrowers to temporarily reduce or stop payments with the expectation that payments will resume at a later date. Gemini said its consideration of forbearance will depend in part on the DCG's willingness to negotiate in good faith towards a consensus ag reement.
