- Genesis, a cryptocurrency broker that is a part of Digital Currency Group, owes creditors more than $3 billion.
- Currently, the business is looking into the possibility of selling some of its venture capital investments.
- Although Genesis hired investment bank Moelis to investigate its options, no formal negotiations for outside funding have taken place.
Sources with knowledge of the situation claim that DCG’s crypto broker Genesis owes creditors more than $3 billion, prompting the company to think about selling off assets in its sizable venture portfolio to raise money.
Digital Currency Group‘s Genesis Owes Billions
After its Genesis unit was caught off guard by the collapse of cryptocurrency exchange FTX in November, DCG, a conglomerate that owns investment manager Grayscale and crypto media outlet CoinDesk, is looking to raise fresh money.
The company is currently looking into the possibility of selling some of its venture capital holdings, which are estimated to be worth $500 million and include over 200 crypto-related projects, including exchanges, banks, and custodians in at least 35 countries.
Given the size of Genesis’s debt to creditors and the lack of success the company has had so far in finding outside funding, DCG faces a challenging task. A public dispute with the Winklevoss twins, whose cryptocurrency exchange Gemini used Genesis in its lending programme, has further complicated the situation.
Gemini co-founder Cameron Winklevoss recently demanded the dismissal of DCG CEO Barry Silbert, describing him as “unfit” to run the business. However, in the wake of the difficulties facing the cryptocurrency industry, Silbert has defended the company’s actions and recovery efforts.
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 high yields. After FTX’s demise, the company did, however, stop customer withdrawals in November, citing “unprecedented market turmoil.”
Genesis has hired investment bank Moelis to investigate its options in an effort to address the situation, but discussions for outside funding have not yet taken place. DCG CEO Barry Silbert recently informed shareholders that the company had shut down its wealth management division and reduced labour costs by 30% at Genesis.
Retail customers who were caught in the middle of the situation have been harmed, and it raises concerns about the stability and sustainability of the market for cryptocurrency loans. The future of DCG’s venture portfolio and its capacity to settle its debts remain uncertain as it continues to weigh its options and look for funding.
