DCG suspends quarterly dividends to preserve cash as Genesis lending unit tries to avoid bankruptcy, report says

Brian Evans
Updated ·2 min read
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Barry Silbert, Founder and Chief Executive Officer, Digital Currency Group, which owns Grayscale Investments
Barry SilbertHeidi Gutman/CNBC/NBCU Photo Bank/NBCUniversal via Getty Images

  • Digital Currency Group is halting quarterly dividends to investors, according to Bloomberg.

  • DCG told investors in a letter Tuesday the move is an effort to preserve liquidity.

  • The firm's lending group Genesis is simultaneously trying to avoid bankruptcy.

Digital Currency Group reportedly plans to halt quarterly dividends to conserve cash, as its Genesis Global Capital lending unit tries to avoid bankruptcy.

According to a Tuesday letter to shareholders seen by Bloomberg, DCG said it is "strengthening our balance sheet by reducing operating expenses and preserving liquidity."

DCG did not immediately respond to Insider's request for comment.

The move comes as DCG faces headwinds on several fronts, including a dispute between founder Barry Silbert and Gemini co-founder Cameron Winklevoss over $900 million of customer funds on Genesis.

Genesis stopped reimbursements in November amid a liquidity crisis and has warned of bankruptcy if fresh capital can't be raised.

Genesis owes creditors more than $3 billion as DCG looks to resolve its financial woes from the blowup of FTX and defunct hedge fund Three Arrows Capital. DCG is also looking to sell assets in its venture portfolio to raise fresh cash, the Financial Times reported last week.

DCG has invested in more than 200 blockchain-related startups in at least 35 countries. Investments are worth around $500 million, sourced told the FT.

DCG also trimmed its workforce last year by 10%, amid the broader collapse of cryptocurrencies that was further exacerbated by the collapse of FTX.

DCG's empire also includes the digital asset fund Grayscale Investment LLC, which oversees the Grayscale Bitcoin Trust, as well as crypto news outlet CoinDesk.

US authorities are also investigating DCG's internal financial practices, Bloomberg said. Silbert has attempted to calm investor concerns in recent months, and said earlier this month in a letter that he thinks "DCG will emerge from this year a stronger company than ever before."

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