Cryptocurrency conglomerate Digital Currency Group (DCG) has announced in its latest letter to shareholders that the company is indefinitely halting quarterly dividends to conserve funds.
DCG Halts Quarterly Dividend
The Barry Silbert-led empire has been under financial pressure since the crypto exchange FTX collapsed in November. This pressure has led the company to halt its DCG quarterly dividends.
According to DCG, the move will help the group “on strengthening our balance sheet by reducing operating expenses and preserving liquidity.” To conserve funds, DCG could also sell some of the assets in its portfolio.
The group has also taken other measures to conserve funds. Earlier this month, DCG shut down its wealth management business HQ Digital and reduced the workforce of its subsidiary Genesis Trading by 30%.
What is Happening at Genesis?
On November 16th, Genesis halted withdrawals citing ‘unprecedented market turmoil.’ Since then, creditor claims have risen above $3 billion, including a $900 million loan to the Winklevoss-founded exchange Gemini.
Since the FTX collapse, which started the liquidity crunch at Genesis, Digital Currency Group has been employing drastic cost-cutting measures. However, there are reports that Genesis may seek restructuring if it fails to repay creditors.
On the Flipside
- The latest series of enforcement actions initiated by SEC chair Gary Gensler has seen both Genesis and Gemini charged for selling unregistered securities.
Why You Should Care
The move from DCG aims to conserve funds as the company continues to explore alternatives to repay investors whose funds have been locked since November.
Read more on Genesis’ debt claims below:
DCG’s Genesis Reportedly Owes Over $3 Billion to Its Creditors
The SEC charges against Genesis and Gemini are covered in:
SEC Charges Genesis and Gemini, Alleges Genesis Loaned Customer Assets to DCG