DCG to close institutional trading services

Subsidiary “TradeBlock” to be closed

Digital Currency Group (DCG), a major crypto asset (virtual currency) conglomerate, will close TradeBlock, a trading service subsidiary for institutional investors, on May 31. Bloomberg and others reported on the 26th.

A DCG spokesperson explained:

DCG has been trying to sell the platform for several million dollars in recent months, according to some people familiar with the matter. A spokeswoman declined to comment on the business sale.

background

DCG is in a predicament, partly due to the collapse of major cryptocurrency exchange FTX. Due to the bankruptcy of FTX, DCG’s virtual currency broker Genesis suspended withdrawals last year.

Along with this, the yield service of the virtual currency exchange Gemini, which used Genesis’ loan function, was also forced to suspend the redemption of user funds. Gemini is demanding DCG to return 12.5 billion yen ($900 million) of funds entrusted to it by users.

DCG also closed its asset management division at the end of January, citing similar reasons such as the macroeconomic environment and the prolonged cryptocurrency market downturn.

connection: DCG to close asset management division

Gemini considers moratorium on debt service

Gemini announced on the 19th of this month that DCG did not pay approximately 88.1 billion yen (approximately $630 million) due the previous week. To avoid DCG’s default, the company will consider whether to impose a moratorium on repayment on this debt.

At that time, he said, it will be important whether the DCG will sincerely participate in discussions on restructuring plans and debt restructuring.

If no agreement is reached with DCG, the company plans to propose a revised reorganization plan with DCG’s subsidiary Genesis, which can proceed without DCG’s agreement.

If Digital Currency Group is deemed to have defaulted, the company’s funding will become even more difficult and the risk of bankruptcy will emerge. It has been pointed out that if DCG were to go bankrupt, the investment trust “GBTC” of the related company Grayscale would be sold, which would affect the market.

connection: Gemini Considers DCG Default Avoidance, Significant Debt Repayment Moves

DCG subsidiary Genesis owes more than ¥490 billion ($3.5 billion) to top 50 creditors including Gemini, Cumberland, Mirana and MoonAlpha Finance.

A Genesis spokesperson said the parties, including Gemini, Genesis, and Genesis’ creditors, are currently discussing the possibility of easing or extending debt repayments to Gemini, Genesis’ bankruptcy proceedings, and maximizing the value of repaying creditors. He said he was discussing options for