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A Thursday release from the Financial Times claims that DCG subsidiary Genesis Global Trading has amassed a debt of over $3B to its creditors. DCG is currently under increased public scrutiny, as the company battles to stay on its feet.
DCG’S VC Holdings Add Up to $500M
According to the report, the broker’s creditors include exchanges Gemini and Bitvavo, alongside crypto savings company Donut. To address Genesis’ significant debt, Digital Capital Group is reportedly considering offloading a portion of its venture capital portfolio. The publication also cited sources close to the matter who provided some insight into DCG’s holdings.
Digital Currency Group reportedly runs one of crypto’s biggest venture portfolios. The company has provided backing for various big-name platforms including Coinbase, and Kraken. DCG has also invested in US bank Silvergate and digital wallet company Circle as well as less popular entities.
Per the release, the VC firm’s portfolio includes over 200 crypto projects across roughly 35 countries. These projects include exchanges, banks, and custodians and are worth approximately $500M.
Genesis Battles to Stay Standing
In the weeks since the FTX collapse, Genesis Global has continued to struggle to regain its footing. Just a few days into the year the company let go of a fifth of its workforce in an attempt to cut costs. This marked the second time Genesis has done so in 6 months.
The report noted that the crypto broker had hired investment bank Moelis to look into other fundraising options. However, according to the sources, Genesis’ attempts to attract outside funding have been futile.
The company initially hit a pause on withdrawals in November 2022 explaining to users that they were facing “unprecedented market turmoil.” Indeed, in a release shortly before, the broker had owned up to exposure to FTX worth $175 million. Genesis then denounced any further ties with the failed exchange explaining that the assets in question were stuck in their FTX trading account.
Earlier reports placed Genesis Global’s deficit at about $1B. However, FTX may not be the only troubled firm Genesis has dealt with in some way.
Fraud Allegations
On Tuesday, Cameron Winklevoss, co-creator of exchange firm Gemini called out the broker, parent firm DCG and CEO Barry Silbert. Winklevoss slammed the relevant entities for ‘falsely portraying’ the financial health of DCG and Genesis. With the new report of a possible far larger debt, Genesis’ and Silbert’s critics would find more meat to attack.
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