Given the ongoing crypto winter and regulatory issues affecting the crypto currency sector, the Digital Currency Group (DCG) announced that it would terminate the operations of TradeBlock, its trade execution and prime brokerage services unit.
TradeBlock’s closure will take effect on Wednesday, May 31st per an official statement issued by the company which owns crypto news hub CoinDesk. A company spokesperson declared that the company chose to sunset the institutional trading aspect of its business due to the grim state of the US economy on top of regulatory matters and the extended run of the crypto winter.
CoinDesk originally acquired TradeBlock back in 2020, but its parent firm later spun it out into a standalone enterprise. The former retained the index data business from the merger, and this was later rebranded as CoinDesk Indices.
While this has long been deemed a successful acquisition on the part of DCG, the company was prompted to close TradeBlock down after finding itself in a bind after its subsidiary Genesis Global Holdco filed for bankruptcy. Genesis’ chief financial officer quit the company back in April, so DCG missed a $360 million payment that was owed to its subsidiary.
A Three-year Run
CoinDesk originally acquired TradeBlock back in 2020, but its parent firm later spun it out into a standalone enterprise. The former retained the index data business from the merger, and this was later rebranded as CoinDesk Indices.
While this has long been deemed a successful acquisition on the part of DCG, the company was prompted to close TradeBlock down after finding itself in a bind after its subsidiary Genesis Global Holdco filed for bankruptcy. Genesis’ chief financial officer quit the company back in April, so DCG missed a $360 million payment that was owed to its subsidiary.
A Better Beginning
At the end of last year, DCG reported a loss of $1.1 billion as it was adversely impacted by the crypto bear market and its cash assets stood at just $262 million.
However, its performance was better during the first quarter of this year, as its revenue rose by 63% from where it was in Q4-2022 thanks to a substantial increase in crypto prices over the first three months of the year.
Based on its Q1 performance, company executives forecast that its 2023 revenue could hit $620 million, while its EBITDA is pegged at $140 million. However, this forecast does not include Genesis following its Chapter 11 filing.