- Digital Currency Group announces plan to shut down TradeBlock.
- All TradeBlock operations are scheduled to cease on May 31.
- This decision was due to multiple reasons including the prolonged crypto winter.
Digital Currency Group (DCG), a prominent player in the cryptocurrency industry, has announced its plans to shut down TradeBlock, a subsidiary that specializes in providing trading and brokerage services for institutional investors.
As we can see from the tweet above, the closure of TradeBlock is scheduled for May 31. This marks the end of its operations after being acquired by CoinDesk, a media platform and DCG subsidiary, just over two years ago.
In accordance, TradeBlock’s digital asset reference rates and indexes will be absorbed by CoinDesk. In addition, the remaining aspects of its business will be spun off as an independent institutional trading platform.
The decision to close down TradeBlock’s institutional trading unit stems from various factors. This includes the challenging regulatory landscape for digital assets in the United States and the impact of the broader economic conditions, as well as the prolonged crypto winter.
A spokesperson from DCG revealed to Bloomberg that these circumstances led to the conclusion that discontinuing the institutional trading platform was the most viable course of action.
Specifically, this development coincides with ongoing negotiations between DCG and the creditors of its bankrupt lending subsidiary, Genesis. Both parties are engaged in a 30-day mediation period to reach a final resolution plan after certain creditors reneged on the initial terms of the agreement.
Gemini, a prominent cryptocurrency exchange and one of Genesis’ major creditors, highlighted that the revised terms being sought by certain parties in the bankruptcy proceedings primarily revolve around DCG’s contribution to the bankruptcy estate. Gemini also confirmed that DCG failed to fulfil a $630 million debt obligation that was due the previous week.
To address its financial obligations and enhance its flexibility, DCG stated on May 9 via Twitter that it is engaged in discussions with capital providers for growth capital and to refinance its outstanding intercompany obligations with Genesis.
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