Major crypto conglomerate Digital Currency Group (DCG) is closing down TradeBlock, a firm that facilitates trading and brokerage services for institutional investors.
According to a May 25 report from Bloomberg, TradeBlock will officially cease operations on May 31, a little over two years after the firm was purchased by crypto-focused media platform and DCG subsidiary CoinDesk.
TradeBlock’s digital asset reference rates and indexes were absorbed by CoinDesk, while the other parts of its business were spun out as an institutional trading platform.
“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,” said a DCG spokesperson to Bloomberg.
The news comes amid ongoing negotiations between DCG and the creditors of its bankrupt lending subsidiary Genesis. The firms recently entered a 30-day mediation period to arrive at a final resolution plan after a subset of creditors reneged on the initial terms of the deal.
According to crypto exchange Gemini, one of Genesis’ main creditors, the revised terms requested by certain parties in the bankruptcy are largely concerned with DCG’s contribution to the bankruptcy estate. Gemini also confirmed in an update last week that DCG missed paying a $630 million debt obligation that was due the week prior.
“On a parallel path and to provide further financial flexibility, DCG is in discussions with capital providers for growth capital and to refinance its outstanding intercompany obligations with Genesis,” said DCG in a May 9 Twitter update.
In January, DCG shut down its wealth management division HQ, which had over $3.5 billion in assets under management. At the time, HQ’s senior management said they were caught off guard by the decision.