Wednesday, September 27, 2023

TradeBlock institutional trading platform closes its doors under DCG’s management

TradeBlock, the prime brokerage subsidiary of Digital Currency Group (DCG), will be shuttered due to the volatile regulations surrounding cryptocurrencies in the US and the current economic climate. TradeBlock, under the leadership of Breanne Madigan, will commence the shutdown process beginning May 31, as reported by Bloomberg on May 25. According to sources, a spokesperson has confirmed that the institutional trading platform segment of their business will be closing down due to the challenging economic climate, an extended period of sluggish cryptocurrency market dynamics, and the complicated regulatory landscape for digital assets in the US. Moreover, you can visit Crypto Genius to start your trading journey.

DCG and its subsidiaries have had their share of challenges amid the prolonged decline in the cryptocurrency market. The recent closure of TradeBlock comes after DCG’s move to wind down its wealth management division headquarters in January 2023. Due to the aftermath of the FTX collapse and the crypto market’s descent, over 500 workers were laid off by DCG corporations. In 2022, the venture capital firm also reported losses exceeding $1 billion, primarily as a result of Three Arrows Capital’s cryptocurrency hedge fund’s downfall.

Gemini, a cryptocurrency exchange that has been struggling, is not receiving its due payment of $630 million from DCG. DCG, on the other hand, may be granted a forbearance by Gemini, meaning they will have more time to repay the debt. DCG may opt for forbearance, which would entail a temporary reduction or suspension of payments, with the intention of resumption at a later stage. The decision of Gemini concerning granting of forbearance hinges on DCG’s willingness to negotiate amicably for reaching a mutually accepted accord.

Difficulties in the cryptocurrency market

DCG’s decision to shut down TradeBlock is attributed to the unfavourable situation in the crypto market. An official from DCG enumerated many hurdles, noting that the tricky state of the economy, the prolonged sluggishness in the crypto market, and the stringent regulations governing digital assets in the United States, all influenced their decision.

In 2020, DCG’s CoinDesk bought out TradeBlock for an undisclosed amount of money. Coindesk Indices, the new name for the indexing side of the business, will remain operational. Nonetheless, TradeBlock’s institutional trading operations will no longer be continued. Reportedly, based on Bloomberg’s sources, TradeBlock will end all operations on the last day of May in the current year.

Additional challenges faced by DCG

Genesis, a subsidiary of DCG, is experiencing similar difficulties. The financial arm of Genesis declared insolvency this past January and is now obligated to reimburse creditors $3.5 billion. Genesis has announced negotiations with financial backers to resolve this situation. Genesis and Gemini are in disagreement with an Earn service which Genesis had previously provided, which made it possible for cryptocurrency investment owners to generate money. Gemini states that DCG, the company leading Genesis, has not launched a transaction of USD 630 million following the deal.

The two additional subsidiaries of DCG were likewise negatively impacted by current conditions. The business shut its wealth management division HQ Digital in Jan. Likewise, in November 2022, Luno, the cryptocurrency exchange associated with DCG, chose to quit offering interest-paying savings wallets.

Role of Tradeblock in the Crypto Market

TradeBlock has offered customized key brokerage solutions to satisfy the requirements of institutional investors in the crypto space. These services consisted of trade execution, custody options, lending along with other speciality offerings. TradeBlock’s end is going to leave a space in the institutional trading room inside the crypto market. TradeBlock’s institutional customers will have to look for alternative options for trading as well as custody requirements. TradeBlock’s shutdown emphasizes the importance associated with many crypto service providers. This guarantees uninterrupted services and also lowers risks related to the closing of one platform.