DCG Announces Shutdown Of Institutional Trading Unit TradeBlock Over 'Crypto Winter'

Digital asset conglomerate Digital Currency Group (DCG) announced the shutdown of its institutional trading arm, TradeBlock, citing cryptocurrency winter and the challenging regulatory environment, days after it failed to pay $630 million to its creditors.

TradeBlock, which is being led by Breanne Madigan, is set to officially begin the shutting-down process on May 31, 2023.

"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," a spokesperson from the institutional trading firm said.

The closure of the TradeBlock, which offers pricing, trade execution and prime brokerage services to institutional investors, is anticipated to have a ripple in the cryptocurrency industry, particularly for institutional investors who depend on the platform.

DCG's latest move came on the heels of reports that the digital asset conglomerate missed a $630 million debt payment to Genesis.

After DCG defaulted on the payment this month, Genesis, one of its subsidiaries and now a bankrupt crypto lender, requested the United States Bankruptcy Court of the Southern District of New York for an extension of its time to file a Chapter 11 plan and solicit acceptance.

According to the crypto lender's legal team, the extension is crucial for the company "to achieve a value-maximizing restructuring without the interruption of a competing plan."

"The nature of the debtors' business, the current market conditions in the digital asset space and the sheer size and breadth of the debtors' assets and liabilities present a number of complexities that must be considered as part of the debtors' negotiation and formulation of the plan," Genesis said.

It also told the bankruptcy court that its request, if granted, will allow the crypto lender to "avoid the disruptions that would result from the development of competing plans and will benefit the debtors' estates, their creditors and all other parties-in-interest. In addition, should a change in circumstances result in a creditor being pressured after the exclusive periods are extended, the creditor may move as a party in interest to terminate the debtors' exclusive periods."

DCG, one of the many casualties of the spectacular collapse of the controversial crypto empire FTX, disclosed that it lost more than $1 billion last year mainly due to the downfall of the crypto hedge fund Three Arrows Capital.

DCG had earlier shut down two of its subsidiaries, which were affected by the digital assets conglomerate's current position. These were wealth management company HQ Digital, which discontinued its operations in January 2023, and the centralized crypto exchange platform Juno, which closed its interest-bearing savings wallets in November last year.