Venture capital firm Digital Currency Group (DCG) has informed shareholders about discontinuing its quarterly dividend payments until further notice. It is believed that the step aims to ensure liquidity preservation, as reported by Cointelegraph.
According to Cointelegraph, insights from a January 17, 2023, letter sent to shareholders mentioned that the firm intends on “strengthening our balance sheet by reducing operating expenses and preserving liquidity.” Reportedly, DCG aims to sell certain assets within its portfolio. The platform’s financial troubles have been on account of a subsidiary, crypto broker Genesis Global Trading, which reportedly has to give back creditors over three billion dollars.
On the basis of information by Cointelegraph, on November 16, 2022, Genesis stopped withdrawals which resulted in customers’ inability to withdraw funds. Post that development, Cameron Winklevoss, on behalf of his exchange Gemini and its users with funds on Genesis, intended to call for the DCG board for removal of Barry Silbert as its CEO. Winklevoss has claimed that Genesis has to pay back $900 million to Gemini for funds that were lent to Gemini regarding Gemini’s Earn program. Furthermore, Winklevoss stated that DCG owed $1.675 billion to Genesis but it was opposed by Silbert.
Moreover, Cointelegraph noted that on November 10, 2022, Genesis revealed that it had an amount worth $175 million at FTX. Reportedly, the development led to DCG directing Genesis to an emergency equity fund worth $140 million for solving liquidity problems. DCG also owns Grayscale Investments and its digital asset trusts, along with investments in more than 200 crypto companies.
(With insights from Cointelegraph)