Digital Currency Group Halts Quarterly Dividends
Digital Currency Group (DCG), the company owned by Barry Silbert, disclosed that it was stopping its quarterly dividends till any additional notice. An email was sent by the platform to its shareholders to disclose its latest move, as reported by Bloomberg.
The crypto investment company stated that it is presently paying attention to minimizing the operating costs as well as saving liquidity while dealing with the worsened market climate at present.
DCG Reportedly Stops Quarterly Dividends as the Genesis Crisis Grows
The FTX collapse played an important role in exposing substantial abruptions in the business empire of Barry Silbert. On the other hand, severe scrutiny is also being faced by DCG.
The venture capital platform possesses many sub-branches. They take into account Grayscale (the largest manager of digital assets), an advisory firm named Foundry, and Genesis (an organizational lending firm).
As a consequence of the financial pressure, Genesis was compelled to halt the latest redemptions and originations of loans. This is a move that put a straight impact on the Gemini Earn project. Subsequently, this paved the way for a fight with Cameron Winklevoss (the co-founder of Gemini).
Winklevoss claimed that DCG was engaged in an accounting scam and misrepresentation. Apart from that, the Genesis co-founder suggested that Silbert should leave his position.
Some former reports have pointed out that nearly $900M is owed by Genesis to the consumers of Gemini Earn (a high-yield savings project). Previously, Gemini and DCG guaranteed the investors that the duo platforms have been endeavoring to reach an appropriate solution. The outcome of the consumer funds frozen in the Gemini Earn project kept is still pending.
However, the clash between the executives of the two platforms came to a serious turn. As a result of this battle, Gemini dismissed the master loan contract with Genesis.
Hence, it formally ceased the project. With this step, Genesis is required to give back outstanding assets. Amid all this confusion, the United States Securities and Exchange Commission (SEC) filed a lawsuit against the 2 crypto platforms.
The securities regulator accused them of offering as well as selling securities that were not registered via the Gemini Earn project. As per the accusation of the SEC, the firms deceived the investors without revealing the unregistered status of the program. Gary Gensler (the chairman of the securities regulator) revealed the news regarding the allegations against Genesis and Gemini.
The chairman mentioned that the charges leveled against the crypto platforms were based on former actions of the companies. In the words of Gensler, the allegations were posed to clarify some points to the investors as well as the marketplace.
According to him, the companies engaged in crypto lending operations as well as the others which play the role of mediators require complying with the securities laws of the US.
Gensler expressed that their intention in doing all this was to shield the investing parties. Along with this, he added, this move will enhance the confidence in markets. He focused on the word “law” and mentioned that it cannot be taken as optional.
Genesis Appoints Moelis Bank to Look into Options to Deal with Debt Crisis
In general, Genesis has a huge debt of up to $3 billion. Thus, DCG contemplates selling some VC portfolios of the crypto broker to repay the creditors. While keeping this in view, Moelis (a worldwide investment bank headquartered in New York) was appointed. Its purpose was to delve into the options related to the debt crisis of Genesis.