While 2022 ended with immense chatter around FTX, 2023 started with increased discussions around Digital Currency Group [DCG]. The parent company of Genesis Global Trading was once again making headlines for pulling the plug on its wealth-management division called HQ.
HQ reportedly entailed over $3.5 billion worth of assets under management. In a memo shared with a customer, HQ cited the ongoing market conditions as the reason behind its closure. The memo further read,
“Due to the state of the broader economic environment and prolonged crypto winter presenting significant headwinds to the industry, we made the decision to wind down HQ.”
It should be noted that the DCG-led platform will close its doors on January 31, 2023. In the memo HQ also put forth the possibility of “revisiting the project.”
“We’re proud of the work that the team has done and look forward to potentially revisiting the project in the future.”
The partners of the company were reportedly unaware of this decision made by HQ. The Digital Currency Group announced the launch of HQ back in June 2022. This subsidiary was set up to offer services ranging from private investments, estate planning, and risk mitigation to insurance.
Will more DCG-backed firms crumble?
Over the last couple of weeks, the entire globe witnessed the downfall of Genesis Global Trading following exposure from FTX. While Genesis continues to slash its workforce, other DCG-backed firms are expected to follow suit.
In addition to Genesis and HQ, DCG is the parent company of Grayscale Investments, mining and staking firm, Foundry, end-to-end crypto trading platform TradeBlock as well as crypto exchange Luno. Another report claims that DCG backs over 150 firms across 35 countries. Therefore, with DCG tumbling, all these platforms could be at risk.