Hundreds of people have lost their jobs at companies owned by cryptocurrency venture capital firm Digital Currency Group (DCG), as the long crypto winter fueled by the FTX crash continues to affect the sector.
Amid recent layoffs, London-based cryptocurrency exchange Luno announced a 35% reduction in its workforce on Jan. 25, letting go about 330 professionals as a result of turmoil in the technology and cryptocurrency industries, which affected the firm’s overall growth and revenue members.
Luno was part of DCG’s portfolio alongside HQ Digital, an asset management subsidiary incubated by DCG since 2020 that managed $3.5 billion in assets as of December 2022. HQ’s operations were shut down in January 2023, affecting at least 26 employees, according to its LinkedIn profile. In a letter to shareholders on January 10, DCG CEO Barry Silbert noted that “While we still believe in the concept of HQ and its outstanding leadership team, the current slowdown is not conducive to the near-term sustainability of that business.”
The current recession cited by Silbert also affected DCG employees. The company reduced its workforce by almost 13% earlier this year, cutting 66 jobs. The cryptocurrency conglomerate said it was trying to clean up its finances and promote several top executives as part of a restructuring process.
DCG’s Genesis subsidiaries cut another 115 jobs. On January 5, Genesis Global Trading announced that it was cutting 30% of its team, or 63 employees, less than six months after revealing plans to cut 20% of its workforce, or 52 employees, in August.
Faced with liquidity problems following the collapse of FTX, Genesis lenders – Genesis Global Holdco, Genesis Global Capital and Genesis Asia Pacific, collectively known as Genesis Capital – have filed for bankruptcy protection on January 19, estimating a liabilities of up to USD 10,000 million. Genesis Global Trading and the Genesis spot and derivatives trading entities continue to operate.
DCG’s portfolio also includes digital currency asset manager Grayscale, trading platform Tradeblock, finance and advisory firm Foundry, and news outlet Coindesk, which is reportedly considering a sale to bolster DCG’s balance sheet.
The Digital Currency Group liquidity crisis has sparked fears of upcoming bankruptcies of cryptocurrency companies and their contagious effects on traditional finance. As the sector lived through a bull market in November 2021, DCG’s valuation surpassed $10 billion with the sale of its shares to SoftBank, Alphabet’s CapitalG and Ribbit Capital. A year later, the company was seeking to raise USD 500 million to finance its portfolio amid liquidity problems.
“We have aggressively cut costs in recent months in reaction to the current state of the market, which has included cutting operating expenses and, unfortunately, reducing DCG’s headcount,” Silbert explained to the shareholders.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.
