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Genesis parent company DCG decides to shut down Wealth unit by Jan
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Genesis Global lays off 30% of its employee
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Winklevoss forces DCG to pay $900M in its customer funds
The year 2022 witnessed many companies fall to dust as several firms filed for bankruptcy in the crypto space.
Days after FTX and Alameda collapsed, Genesis Global, which acquired $140 million from its parent company, the Digital Currency Group, decided to halt new loan sanctions and withdrawals. This was announced through a Twitter thread.
Our #1 priority is to serve our clients and preserve their assets. Therefore, in consultation with our professional financial advisors and counsel, we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business.
— Genesis (@GenesisTrading) November 16, 2022
Also Genesis Global CEO, Derar Islim assured creditors over the call that the firm is looking for solutions and trying to find a new source of fresh liquidity.
Genesis & DGC Tumbles With Challenges
However, on Jan 5, Genesis laid off 30% of its employees which indicates the company’s financial instability along with doubting its sustainability in the market. This is not the first time, even in 2022 the company had laid off 20% of its 260 staff, but the fall of FTX has now worsened matters.
Now, after Genesis fired 30% of its staff, its parent company, Digital Currency Global (DCG) plans to shut down its wealth department. The company spokesperson confirmed that HQ, its wealth management division will be closed by January 31 and hopes to revisit the project in the future.
HQ was the one that managed capital for crypto entrepreneurs and investors. Even the Digital Currency Group was hit with various challenges after FTX and Alameda collapsed
On the other hand, Gemini exchange’s co-founder Cameron Winklevoss wrote an open letter to DCG chief Barry Silbert which claimed that 34,000 Gemini customers of Earn products are still waiting for their withdrawals to resume. The note also claimed that DCG owes $900 million to its Gemini customers.
However, DCG chief Silbert has maintained that the above figure is inaccurate and the DCG is absolutely in good financial condition. On the contrary, the current event of HQ closure will definitely question DCG’s stand on financial terms.