Genesis Parent DCG Halts Dividend Payments to Conserve Liquidity After FTX Implosion
TL;DR Digital Currency Group, the parent company of Genesis Global, has announced it will cease paying quarterly dividends in order to conserve funds. The company recently laid off 30% of its employees and shut down its wealth management business due to financial distress caused by the FTX implosion. Gemini co-founder Cameron Winklevoss accused DCG of accounting fraud and disseminating misinformation about the firm's financial standing.
Digital Currency Group, the parent of ailing cryptocurrency company Genesis Global, has said it is halting quarterly dividends to conserve funds.
The company’s letter to shareholders stated that the group is committed to enhancing its balance sheet by reducing operational costs and cash management.
DCG Reeling Under Financial Stress
According to reports, the group shut down its wealth management business HQ Digital earlier this month, It became yet another victim of the FTX implosion. Since the FTX collapse, the Digital Currency Group has been employing drastic cost-cutting measures.
According to reports, the Grayscale parent laid off 30% of the employees at cryptocurrency lender Genesis and closed its headquarters. It owes more than $3 billion to creditors. DCG’s subsidiary is reportedly considering selling off assets from its sizable venture portfolio to obtain money.
BeInCrypto previously reported that Genesis is on the verge of filing for Chapter 11 bankruptcy. In a letter published on Jan. 10, CEO Barry Silbert told the shareholders, “Bad actors and repeated blow-ups have wreaked havoc on our industry, with ripple effects extending far and wide.”
I’ve been reflecting quite a bit about the past year, the state of the industry and where things go from here.
Here is an update to address those reflections, other developments and some speculation about @DCGco (1/10)https://t.co/xEohthubvD — Barry Silbert (@BarrySilbert) January 10, 2023
The letter was in response to Gemini co-founder Cameron Winklevoss asking Genesis to address the issues of Gemini Earn. Winklevoss published a second letter targeting the Genesis CEO.
Winklevoss described a complex intertwining of transactions between DCG’s Genesis and Three Arrows Capital (3AC). He also accused DCG of accounting fraud and disseminating misinformation about the firm’s financial standing.
Earn Update: An Open Letter to the Board of @DCGco pic.twitter.com/eakuFjDZR2 — Cameron Winklevoss (@cameron) January 10, 2023
Meanwhile, Grayscale is locking horns with the US Security and Exchange Commission (SEC) regarding its ETF offering.
The bankrupt exchange recently told creditors that cyber-attacks resulted in the theft of around $415 million.