DCG’s TradeBlock unit launches Prime Brokerage for Sunsets Trade Execution

Digital Currency Group (DCG), the parent company of CoinDesk, is closing down its trade execution and prime brokerage services unit, TradeBlock, citing the downturn in the cryptocurrency market and regulatory uncertainties.

The unit, which provides trading services to institutional investors, will be shut down effective May 31. DCG spokesperson said in an email, “Due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S., we made the decision to sunset the institutional trading platform side of the business, known as TradeBlock, effective May 31, 2023.”

Bloomberg first reported the story.

TradeBlock was acquired by CoinDesk in 2020 and was later spun out as its own standalone business. CoinDesk kept the index data business from the acquisition, which was rebranded as CoinDesk Indices, and this has proven to be a successful acquisition, according to the spokesperson.

The move comes after DCG found itself in a difficult market environment after its subsidiary Genesis Global Holdco filed for bankruptcy earlier this year. Earlier this month, DCG missed a $630 million debt payment owed to Genesis, while its CFO resigned in April.

In 2022, DCG reported a loss of $1.1 billion as it suffered the effects of the crypto bear market and ended the year with just $262 million in cash. However, the firm saw a better first quarter this year, as its revenue rose 63% from the previous quarter due to soaring crypto prices. DCG also projected, based on the first quarter’s performance, that it’s headed toward 2023 revenue and Ebitda of about $620 million and about $140 million, respectively – excluding the Genesis business, which remains in Chapter 11.