According to a report from Bloomberg, Digital Currency Group (DCG), the parent firm of Grayscale and the beleaguered cryptocurrency lender Genesis, has halted its quarterly payouts in an effort to maintain its liquidity.
In a statement that was sent to DCG’s shareholders, the company said, “In response to the current climate in the market, DCG has been focused on strengthening our balance sheet by cutting operational expenditures and conserving liquidity.” As a result of this, we have come to the conclusion that the quarterly dividend payout for DCG should be put on hold until further notice.
After the collapse of FTX and the hedge fund Three Arrows Capital, the ailing trading business Genesis, which is controlled by DCG, was forced to restrict withdrawals since its lending arm had been badly damaged by the two events. As a result of all of these occurrences, DCG is now going through a difficult time.
Concerning the company’s internal money transactions, Digital Currency Group is now being investigated. The United States Securities and Exchange Commission has also been involved in the investigation (SEC).
Cameron Winklevoss, a co-founder of Gemini, recently published an open letter in which he demanded that Barry Silbert step down from his position as CEO of DCG. Winklevoss pointed out that DCG had not provided Genesis with genuine funds to compensate for the losses sustained by 3AC. Instead, DCG created a promissory note payable to Genesis for the sum of 10 years with an interest rate of 1% and a maturity date of 2032.
Compiled by Coinbold
