Due to the Genesis Crisis, DCG halts its quarterly dividends.

After being impacted by the collapse of FTX, DCG's subsidiary faced a second round of layoffs. Digital Currency Group (DCG), a crypto conglomerate owned by Barry Silbert, announced that it would stop paying quarterly dividends until further notice.

The cryptocurrency investment company stated in an email to shareholders that it is now focusing on “cutting operating expenses and conserving liquidity” in reaction to the current market climate. The communication was obtained by Bloomberg.

Problems with DCG

Barry Silbert's empire was significantly compromised by the FTX crash, with DCG coming under close examination. The venture capital business owns a number of companies, including consultancy firm Foundry, institutional loan company Genesis, and Grayscale, the biggest online asset manager in the world.

Genesis was compelled to halt new loan originations and redemptions as a result of its financial predicament, which had an immediate impact on the Gemini Earn program. As a result, the conflict with the co-founder of the cryptocurrency exchange, Cameron Winklevoss, intensified. Winklevoss accused DCG of accounting fraud and deception and demanded Silbert resign.

According to earlier reports, Gemini Earn customers who invested in Genesis' high-yield savings program owe the company $900 million. Investors were originally reassured by DCG and Gemini that the two businesses were looking for a solution.

SEC Focuses on “Gemini Earn” Programme

The dispute between both the two CEOs caused Gemini to dissolve its master loan arrangement with Genesis, “officially” ending the project while the fate of the client cash trapped in the Gemini Earn program remained in limbo. Genesis must repay any unpaid assets as a result of this action.

A day later, the US Securities and Exchange Commission (SEC) filed a lawsuit against the two cryptocurrency companies for purportedly using the program to offer and sell unlicensed securities to customers. Gary Gensler, chair of the SEC, said:

“Today‘s charges build on previous actions to make clear to the marketplace and the investing public that crypto lending platforms and other intermediaries need to comply with our time-tested securities laws. Doing so best protects investors. It promotes trust in markets. It’s not optional. Its the law.”

Genesis is currently drowning in an astounding $3 billion in debt, and DCG was attempting to auction off the venture capital holdings of the cryptocurrency broker in order to pay off part of its debt. As a result, Genesis contacted Moelis, a global investment firm with its headquarters in New York, to investigate solutions for partially solving its debt crisis. Discussions of a new capital infusion into the cryptocurrency lender, though, seem to be off the table.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

iOS: t.ly/UUCj

Android: t.ly/cfYt