DCG scrambling to raise funds to cover Genesis’ $3B debt burden DCG scrambling to raise funds to cover Genesis’ $3B debt burden
DCG is trying to liquidate its venture capital holdings worth $500 million, which is less than 17% of Genesis' outstanding debt.
2 min read
Updated: Jan. 12, 2023 at 3:50 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Embattled crypto lender Genesis owes over $3 billion to its creditors, the Financial Times reported on Jan. 12, citing sources familiar with the matter.
The lender owes $900 million to users of Gemini’s Earn program, over $303 million to Dutch exchange Bitvavo, as well as money to users of crypto savings firm Donut.
On Jan. 10, Bitvavo rejected DCG’s proposal to repay 70% of its debt
Genesis is in talks with investment bank Moelis to explore its options but external funding attempts have failed so far. Genesis’ parent company Digital Currency Group (DCG) is seeking to unload its venture capital portfolio to raise funds, according to the FT report.
DCG, which also controls crypto media outlet Coindesk and investment manager Grayscale, has invested in around 200 crypto projects across more than 30 countries.
The most popular investments, according to the DCG website, include exchanges Coinbase and Kraken, crypto investigation platform Chainalysis, Decentraland, USD Coin (USDC) issuer Circle, and Dapper Labs, the firm behind NBA Top Shots and CryptoKitties non-fungible token (NFT) collections. DCG also invested $250,000 in the now-defunct crypto exchange FTX in July 2021.
Anonymous sources told FT that DCG’s venture investments are illiquid since investors tightened funding amid a global economic downturn. Moreover, the collapse of FTX has also made investors wary of funding crypto projects. This means that DCG’s portfolio could take some time to sell.
Even if DCG successfully sells its venture capital holdings, it would not be enough to cover Genesis’ outstanding debts. FT sources pegged the value of DCG’s portfolio at around $500 million, which is less than 17% of Genesis’ debt burden.
Genesis halted withdrawals in November on the heels of the FTX implosion, citing “unprecedented market turmoil.” The Winklevoss twins, founders of Gemini, have been engaged in a public feud with DCG CEO Barry Silbert over Genesis’ debt. The Winklevii called for the removal of Silbert earlier this week, stating that he was “unfit” to run the conglomerate.
DCG is currently being investigated by the U.S. Department of Justice as well as the Securities and Exchange Commission over internal money transfers to Genesis.
Mentioned in this article
Digital Currency Group 
Genesis 
CoinDesk 
Grayscale Investments 
Gemini 
Circle 
Dapper Labs 
Kraken 
Coinbase 
Chainalysis 
Barry Silbert 
Cameron Winklevoss 
Tyler Winklevoss Author 
Monika Ghosh
In 2020, Monika immersed herself in crypto, maintaining skepticism yet firmly believing blockchain could address key issues like financial disparity and transparency. A book-lover, she's also a passionate food enthusiast.
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In this article
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors.
CoinDesk
CoinDesk was founded by Shakil Khan as an integrated platform for media, events, data & indices for the next generation of investing and the future of money.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Circle
Circle Internet Financial Ltd is a global internet finance company, built on blockchain technology and powered by crypto assets.
Dapper Labs
Dapper Labs, the company behind CryptoKitties, NBA Topshots, and the Flow blockchain, uses blockchain technology to bring NFTs and new forms of digital engagement to fans around the world paving the way to a more open and inclusive digital world starting with games and entertainment.
Kraken
Kraken is a San Francisco-based digital asset exchange in euro volume and liquidity that trades various currencies, including Canadian dollars, US dollars, British pounds, and Japanese yen.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Chainalysis
Chainalysis builds trust in blockchains between people, businesses and governments.
Barry Silbert, recognized as a foundational figure in the cryptocurrency landscape, serves as the CEO and founder of Digital Currency Group (DCG).
Cameron Winklevoss, a renowned figure in the cryptocurrency sector, is a Harvard University graduate with a degree in Economics and holds an MBA from Oxford University.
Tyler Winklevoss, known for his pioneering role in the cryptocurrency realm, is a Harvard University alumnus with a degree in Economics and holds an MBA from Oxford University.