According to the breaking news, the digital currency company Digital Currency Group (DCG), which is on the verge of bankruptcy, has over $3 billion in debt. DCG’s subsidiaries Genesis and Grayscale are having a tough time.
Next FTX event: DCG owes $3 billion
According to a January 12 report from the Financial Times, one of DCG’s subsidiaries, Genesis, allegedly owed $900 million to customers of cryptocurrency exchange Gemini. Its parent company, Digital Currency Group (DCG), which also owns the Grayscale Investments and Trust product line, is trying to sell some of its venture capital assets to close the gap.
According to people familiar with the matter, DCG’s venture arm has more than 200 crypto-related projects “such as exchanges, banks and custodians in at least 35 countries” with a total value of around $500 million. Genesis reportedly hired investment bank Moelis to explore strategic alternatives, but those familiar with the matter said there was little capital infusion interest. On January 5, Genesis laid off 30% of its staff to cut costs; this was the second of its kind in six months.
On January 12, DCG CEO Barry Silbert wrote to shareholders that “bad actors and the collapse of leading crypto companies have taken the industry by storm.” Silbert also revealed that Three Arrows Capital still owes Genesis $447.5 million and 4,550 Bitcoin (BTC) worth $78 million.
We reported that on November 16, 2022, Genesis stopped withdrawals due to “unprecedented market turmoil”. At the time, the company reportedly had $175 million worth of funds stuck in FTX and had already received $140 million in equity infusions to cover losses.
Genesis Global was thought to have an estimated $1 billion deficit
According to Cameron Winklevoss, co-founder of cryptocurrency exchange Gemini, Genesis lent more than $2.3 billion to the now-defunct hedge fund Three Arrows Capital, with a loss of $1.2 billion when the firm went bankrupt in June 2022. Gemini said he lent over $900. Millions of customer deposits in Genesis as part of the Earn program. More than 340,000 users were affected following the Gemini Earn Genesis Global dispute.
cryptocoin.com As we have reported, Gemini co-founder Cameron Winklevoss recently accused DCG CEO Barry Silbert of ‘defrauding customers. Although Silbert later denied this and the claims that the company would go bankrupt, recent reports suggest the opposite. The community is currently talking about DCG and its subsidiary, Genesis, also suffering from liquidity shortages and on the verge of bankruptcy.
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