Digital Currency Group Shuts Down Wealth Division Amid Difficulties

Digital Currency Group has shut down its wealth-management division, indicating further trouble in the crypto industry which has been experiencing a prolonged slump.

‍
The firm, which is based in Stamford, Connecticut, is dealing with a number of issues. It dismissed 10% of its staff at the end of last year, and Genesis, its asset manager, eliminated more than 60 positions, amounting to 30% of its workforce. DCG has confirmed that it has shuttered its wealth-management division, HQ. This closure was first reported by The Information.

‍
"Given the current state of the economy and the prolonged crypto winter, we have decided to wind down HQ, effective January 31," a DCG spokesperson said in an emailed statement. "We are proud of the work that the team has done and look forward to potentially revisiting the project in the future."

‍
Barry Silbert's company is facing changes and challenges within some of its biggest subsidiaries following the sudden collapse of FTX, one of the world's largest crypto exchanges, at the end of 2022. Genesis has been trying to raise fresh cash for its lending unit, but some investors approached for the lifeline have balked at the interconnectedness between Genesis and other related entities that are part of DCG. Genesis has warned that it might have to seek bankruptcy protection.

‍
Cameron Winklevoss, CEO of Gemini Trust Co., has accused Barry Silbert of "bad faith stall tactics" and of intermingling funds within his conglomerate. This, according to Winklevoss, has left $900 million in customer assets needlessly in limbo since FTX's meltdown.

‍
Gemini customers have been unable to access funds in a lending product called Earn, which offered investors the potential to generate as much as 8% in interest on their digital coins. The product lent coins to Genesis Global Capital, one of the companies controlled by Digital Currency Group.

‍
Winklevoss asked Silbert to agree to work together to fix the problem, which he says affects more than 340,000 Earn customers, by Jan. 8. He didn’t say what would happen if no agreement was reached by then.