Hundreds of people have lost their jobs at companies owned by crypto venture capital firm Digital Currency Group (DCG), as the long crypto winter continues to plague the sector due to the collapse of FTX.
Amid recent layoffs, London-based cryptocurrency exchange Luno announced a 35% reduction in its workforce on January 25, laying off around 330 professionals amid turmoil in the tech and crypto industries, leaving the firm affected the overall growth and revenue of Members
Luno was part of DCG’s portfolio alongside HQ Digital, an asset management subsidiary incubated by DCG from 2020 that managed $3.5 billion in assets as of December 2022. According to his LinkedIn profile, HQ operations were shut down in January 2023, affecting at least 26 employees. In a January 10 letter to shareholders, DCG CEO Barry Silbert noted that “while we still believe in the HQ concept and its outstanding leadership team, the current downturn is not conducive to the near-term sustainability of this business.”
Related: The legal woes of Gemini and Genesis have further shaken the industry.
The current recession described by Silbert also affected DCG employees. The company cut about 13 percent at the start of the year, cutting 66 jobs. The crypto group said it is looking to improve its finances and promote several senior executives as part of a restructuring process.
Another 115 jobs were cut by DCG’s Genesis subsidiaries. Genesis Global Trading on January 5 30% reduction announced Less than six months after his team, or 63 employees, disclosed plans to cut 20 percent of its staff, or 52 employees, in August.
Faced with liquidity problems after liquidation of FTXGenesis’ credit entities – Genesis Global Holdco, Genesis Global Capital and Genesis Asia Pacific, collectively referred to as Genesis Capital. Filed for bankruptcy protection. on January 19, estimating liabilities up to $10 billion. Genesis Global Trading and Genesis spot and derivatives trading entities are operating.
DCG’s portfolio also includes digital currency asset manager Grayscale, trading platform TradeBlock, financing and advisory company Foundry, and media outlet Coindesk, which reportedly Considering the sale To strengthen DCG’s balance sheet.
The liquidity crisis in the digital currency group has sparked fears of future crypto company crashes and their contagion effects on traditional finance. When the industry faced a bull market in November 2021, DCG’s valuation rose above $10 billion and its stake was sold to SoftBank, Alphabet’s CapitalG, and Ribbit Capital. A year later, the company was looking for Raise $500 to fund his portfolio. Amid liquidity problems.
“We have been aggressively cutting costs over the past few months in response to the current market conditions, including reducing operating expenses and, unfortunately, DCG personnel,” Silbert explained to DCG shareholders. It involves reducing the force.”
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