Digital Currency Group (DCG), one of the key companies in the crypto business, is currently experiencing a severe financial issue as the industry continues to develop and mature.
In addition, DCG’s subsidiary Genesis owes $3 billion to creditors and may sell assets to raise funds.
Genesis Owes Billions – Digital Currency Group
DCG, owner of CoinDesk and Grayscale, seeking funds after Genesis was affected by FTX exchange fall in Nov.
The company is considering selling some of its crypto-related venture capital holdings, which include over 200 projects such as banks, exchanges, and custodians in various countries. It is valued at around $500 million.
The enormous debt of Genesis to creditors is a significant challenge for DCG, as the company’s attempts to find external funding have yet to be successful. Dispute with Winklevoss twins, who used Genesis in Gemini’s lending program, complicating the situation.
According to Cameron Winklevoss of Gemini calls for firing of DCG CEO Barry Silbert for being unqualified. However, in light of the crypto industry’s difficulties, Silbert has defended the company’s activities and recovery attempts.
One of the biggest lenders in the cryptocurrency market, Genesis was a fully-owned subsidiary of DCG and allowed users to lend out their coins in exchange for hefty yields. Following the demise of FTX, the corporation stopped customer withdrawals in November, citing extreme market turbulence.
Furthermore, to resolve the issue, Genesis has hired Moelis to explore options, but external funding still needs to be secured. DCG CEO Barry Silbert announced 30% staff cut and closure of wealth management business to reduce costs.
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Moreover, the crypto lending market’s instability and sustainability affect retail customers. There are concerns about selling crypto-related venture capital holdings, which include over 200 projects in various countries. DCG’s future and ability to repay creditors is uncertain as it seeks funding options.