Digital Currency Group (DCG) is a conglomerate that unites several well-known crypto companies. The crypto-focused venture capital firm has been embroiled in several scandals over the past year. That said, she recently revealed the losses that the crypto market crash and the bankruptcy of Genesis caused her to suffer.
The bear market and the bankruptcy of Genesis got the better of DCG!
DCG, the parent company of crypto lender Genesis, has made losses estimated at $1.1 billion in 2022. In the report announcing the news, we learn that the losses are the result of the bear market that began last year. They also relate to the bankruptcy of the subsidiary Genesis. “In addition to the negative impact of lower bitcoin and crypto-asset prices, last year’s results reflect the impact of Three Arrows Capital’s (3AC) default on Genesis“, can we read in the report.
It should be mentioned that Genesis recorded a loss of $24 million in the fourth quarter of 2022. The conglomerate’s revenues over this period were estimated at $143 million. In all of 2022, Genesis’ parent company earned $719 million. At the end of December 2022, it held total assets estimated at $5.3 billion. In these funds, there was only $262 million of cash and cash equivalents.
Separately, Digital Currency Group’s equity was valued at $2.2 billion. The company’s shares were then trading at nearly $28. The report clarified : “This assessment is generally in line with the 75% to 85% decline in sector equity values over the same period“.
It should be mentioned that another subsidiary of DCG is in trouble, apart from Genesis. This is Luno, a crypto company based in London. The platform recently laid off 35% of its employees. She explained that she struggles because of “the incredibly tough year for the wider tech industry and the crypto market“. In the midst of all this, Digital Currency Group restructured its $1.1 billion promissory note. The company has also promised to issue a new type of shares which will be redeemable and convertible.
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