- The Digital Currency Group is halting dividend payments in a bid to maintain liquidity.
- Distressed subsidiaries, including Genesis, have prompted DCG to make this decision.
- The company’s CEO has been the subject of a public feud with Gemini’s Cameron Winklevoss.
The suspension of dividends has become the latest development in the financial predicament of the Digital Currency Group (DCG). In a recent letter to its shareholders, the crypto conglomerate informed that it would be halting its quarterly dividend payments until further notice.
According to a recent report, the step has been taken in a bid to save cash as the firm navigates the liquidity issues of its subsidiaries. DCG is reportedly focusing on strengthening its balance sheet by bringing down operational expenses and preserving liquidity.
The Digital Currency Group boasts an impressive portfolio and is the parent firm of Genesis Global and Grayscale Investments. However, the collapse of Bahamas-based crypto exchange FTX has dealt a rather hard blow to this crypto empire.
DCG’s financial woes can be attributed to one particular subsidiary, Genesis Global. The crypto broker, which suspended withdrawals in November 2022, reportedly owed more than $3 billion to its creditors. Among those creditors is the crypto exchange Gemini.
Cameron Winklevoss, the co-founder and President of Gemini has publicly claimed that Genesis owes his customers $900 million. These funds were lent to the latter as per Gemini’s earn program. The non-repayment led to Winklevoss posting an open letter to DCG’s board of directors, which came just days after a similar letter to Barry Silbert, the founder, and CEO of DCG.
The letters accused Silbert of operating in bad faith and engaging stall tactics instead of cooperating toward a solution. The letter also alleged the commingling of funds between Genesis and parent firm DCG.