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Digital Currency Group (DCG) announced in its recent letter to shareholders that the company will indefinitely pause its quarterly dividend to conserve funds.
DCG discontinues quarterly dividend
The Barry Silbert-led empire has been under financial pressure since the collapse of cryptocurrency exchange FTX in November. This pressure has led the company to DCG stop Quarterly earnings.
According to DCG, the move will help the group “strengthen our balance sheet by reducing operating expenses and maintaining liquidity.” To conserve funds, DCG may also sell some of the assets in its portfolio.
The group also took other measures to conserve funds. Earlier this month, DCG shut down wealth management firm HQ Digital and cut the workforce at its subsidiary Genesis Trading by 30%.
What happens in Genesis?
On November 16, Genesis halted recalls, citing “unprecedented market turmoil”. Since then, creditors’ claims have risen to more than $3 billion, including a $900 million loan to the Winklevoss-founded Gemini exchange.
Since the collapse of FTX, which started the Genesis liquidity crisis, Digital Currency Group has been taking drastic measures to cut costs. However, there are reports that Genesis may seek restructuring if it fails to pay creditors.
on the flip side
- The latest series of enforcement actions initiated by SEC Chairman Gary Gensler has seen both Genesis and Gemini charged with selling unregistered securities.
Why should you bother
The move by DCG is aimed at preserving funds as the company continues to explore alternatives to paying off investors whose funds have been locked out since November.
Read more about Genesis debt claims below:
DCG’s Genesis reportedly has more than $3 billion owed to its creditors
The SEC’s accusations against Genesis and Gemini are covered in:
Genesis and Gemini are charged by the SEC, and Genesis colleges have loaned client assets to DCG
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