A frightening announcement came from Digital Currency Group (DCG), a large crypto-focused company. According to the latest statements, the company announced its dividend payments. This has worried investors, “Is Digital Currency Group the new FTX?” It caused the question to be repeated. Here are the details…
Cryptocurrency company stopped paying dividends
Digital Currency Group (DCG) has stopped paying dividends, according to a letter the company sent to its shareholders on Jan. The company said in its letter that it has “decided to suspend the quarterly dividend distribution until further notice.” It is unclear whether these dividends were previously paid out of the company’s general earnings or crypto profits. DCG cited their goal of reducing operating costs during the weak crypto market as the reason for ending dividend payments. It also demonstrated its continued efforts to maintain liquidity.
DCG has not publicly announced that it will stop paying dividends. The news was reported by the DCG subsidiary, which received a copy of the shareholder letter. The company’s ongoing financial woes were already publicly known. Genesis, another subsidiary of DCG, seems to be the main cause of DCG’s troubles. cryptocoin.com As we reported, Genesis stopped user withdrawals and loan repayments in November. Following the collapse of FTX, Genesis announced that it was temporarily suspending redemptions and new credit creation. In a statement on Twitter, Genesis said that “abnormal withdrawal requests” exceeded its “available liquidity”.
It has also suspended withdrawals on Gemini Earn, a product offered in partnership with crypto exchange Gemini and officially discontinued last week. Genesis also laid off 30 percent of its employees earlier this month. The company reportedly owes $3 billion to creditors, and DCG is working to meet that. However, the financial stress is likely to spread throughout DCG. In recent weeks and months, the firm has shut down asset management subsidiary HQ Digital and suspended interest-bearing accounts at crypto wallet subsidiary Lumo.
Justin Sun ready to spend money on DCG
As DCG continues to have problems, recently TRON Foundation founder Justin Sun announced that he is willing to spend as much as $1 billion to acquire the assets of Digital Currency Group. The Chinese crypto entrepreneur said in an interview with Reuters that he is willing to spend that amount to buy some of DCG’s assets “depending on the assessment of the situation.” Sun did not specify what portions of DCG’s VC assets it plans to acquire.
Sun previously said he was ready to provide billions of dollars in aid to troubled cryptocurrency exchange FTX before filing for bankruptcy in mid-November. However, the deal did not materialize in the end. Now, it is also unknown whether Sun will go to any agreement with DGC.
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