Digital Currency Group’s crypto brokerage firm Genesis owes creditors more than $3 billion, which is pressuring the crypto conglomerate to consider selling assets in its large enterprise portfolio to raise funds.
according to a report good DCG, the parent company of Genesis, plans to raise fresh cash after its lending arm suffered heavy losses in the wake of the collapse of FTX in November, according to the Financial Times. The company is looking to sell off portions of VC assets worth about $500 million.
DCG is a venture capital firm focusing on the digital currency market. The group lists over 160 companies in its portfolio on its website, of which it has acquired 28. CoinDesk, Grayscale and Genesis are three of the largest companies listed in its portfolio.
DCG is also an investor in US crypto exchanges Coinbase and Kraken, and its other holdings include US firm Circle, which issues stablecoin USDC, and blockchain analytics companies Chainalysis, Dune Analytics, Elliptic and Etherscan.
Origin owes up to $3 billion to customers, including $900 million to Gemini customers and more than $301 million to users of Dutch crypto exchange Bitvavo. According to the FT, a separate group of Genesis creditors are being represented by lawyers for Proskauer Rose.
In the wake of the collapse of FTX, Genesis announced that it is temporarily suspend redemption and new loan originations. In a statement on Twitter, Genesis says that “unusual withdrawal requests” have exceeded its “current liquidity”.
The crypto lender has since revealed it owes $175 million. off in its FTX trading account. the company tried to raise emergency loan of $1 billion saying in mid-November that it was facing a “liquidity crunch due to certain illiquid assets on its balance sheet”.
Gemini Trust Earn, a program that partnered with Origin to offer high-interest accounts, also halted redemptions in mid-November. Cameron Winklevoss, the exchange’s CEO and co-founder, has since been critical of DCG CEO Barry Silbert.
As reported, Cameron wrote an open letter to the Digital Currency Group’s (DCG) board earlier this week. remove silbert, He also claimed that DCG defrauded over 340,000 Gemini and Earn users by falsely claiming that Genesis was solvent. he said:
“They did so in an attempt to mislead lenders to believe that DCG had absorbed huge losses arising out of the collapse of Three Arrows Capital Limited (3AC) and induced lenders to continue lending to Genesis. By lying, he hoped to buy time to dig himself out of the hole he had made.”
In response, Silbert published a shareholder letter containing a Q&A section that extensively discussed the relationship between Digital Currency Group, Genesis, and Three Arrows Capital. In the letter, he claimed that DCG owed Origin $447 million, contradicting Winklevoss’s claim that the company owed Origin $1.675 billion.
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