Digital Currency Group, a venture capital firm that owns a stake in more than 200 crypto projects, announced the dividend halt while one of its subsidiaries is in financial strife.
Venture capital firm Digital Currency Group (DCG) has told shareholders it is suspending quarterly dividend payments until further notice as it tries to conserve cash.
According to a letter sent to shareholders on January 11. 17, the company focused on “strengthening our balance sheet by reducing operating expenses and saving money.”
Its financial problems stem from the woes of its subsidiary, crypto trader Genesis Global Trading, which owes more than $3 billion to its creditors and DCG is also considering selling some of its assets.
Customers can’t withdraw money from Genesis after they close on November 1. On January 16, that prompted Cameron Winklevoss – on behalf of Gemini exchange with his employees who have money in Genesis – to ask the directors of DCG to remove Barry Silbert as the director of the company in a letter opened on January 10. According to Winklevoss, Genesis owes Gemini $900 million in loans to Genesis under the Gemini Acquisition Program, which offers customers an annual return of up to 7.4%. He also claimed that DCG owed Genesis $1.675 billion, although DCG CEO Barry Silbert denied this.
Soon, on Jan. 12, the United States Securities and Exchange Commission (SEC) added fuel to the fire by accusing the two companies of offering unregistered securities through the Earn program.
The story of Genesis appeared first on November 16, when he stopped the withdrawal of customers following the failure of FTX, citing “unprecedented market turmoil” which led to the withdrawal rating of “negative”.
On January 10, less than a week earlier, Genesis revealed that it had about $175 million locked up in FTX, leading DCG to send Genesis an emergency equity injection of $140 million to solve its financial problems.
DCG also owns Greyscale Investments and a series of digital asset trusts and has invested in more than 200 companies in the crypto sector, including well-known names such as the blockchain research company Chainalysis, the provider of Circle stablecoins, and the digital asset exchange Kraken. Cointelegraph has contacted DCG for comment but has not received a response.
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