Things are not going well for the Digital Currency Group, the crypto conglomerate that includes Genesis, Grayscale and CoinDesk. On Thursday, January 5, the company confirmed that its asset management division HQ is closing, as reported by The Information. This news comes after it was previously announced that Genesis had to let go of 30 percent of its staff.
Crypto Winter and Macroeconomics
The reasons for the decision to close HQ include the long and cold crypto winter. In addition, it refers to the challenging macroeconomic conditions. “Due to the status of the broader economic climate and the prolonged crypto winter bringing significant headwinds to the industry, we have decided to close HQ as of January 31, 2023,” a Digital Currency Group representative told Decrypt.
“We are proud of what the team has achieved for each and look forward to restarting the project in the future,” concludes the Digital Currency Group. It is clear that the Digital Currency Group and the companies under this giant are still suffering from the implosion of FTX last November. HQ is an asset manager that manages capital for crypto entrepreneurs and investors. The company had approximately $3.5 billion in assets under management in December.
Partners are not happy
HQ’s partners are rumored to have been completely uninvolved in the decision to shut down the company. In November wrote Digital Currency Group CEO Barry Silbert to his investors that his companies were not affected by the collapse of FTX. It is striking that it was announced at the time that the Digital Currency Group has approximately 575 million in debt with Genesis.
The latter in turn owes 900 million dollars to Gemini and more than 280 million dollars to the Dutch company Bitvavo. We don’t know the details, but these kinds of constructions certainly don’t seem to bode well for the financial health of the Digital Currency Group. If this giant also falls, it could very well give the Bitcoin price another blow. On that note, let’s hope that the Digital Currency Group and Genesis get things back on track soon.