According to a recent report, cryptocurrency broker Genesis Global Trading owes its debtors more than $3 billion. Digital Currency Group (DCG), the parent company, is looking to sell some of its venture capital holdings to compensate for the deficit. DCG owns Grayscale Investments and several digital asset trusts.
DCG’s venture arm reportedly has more than 200 crypto-related projects “such as exchanges, banks, and custodians in at least 35 countries,” with a combined worth of about $500 million, as stated by people familiar with the development.
A previous estimate placed Genesis Global’s debt at $1 billion. According to Gemini’s co-founder Cameron Winklevoss, Genesis lost $1.2 billion on loans to the collapsed hedge fund Three Arrows Capital in June 2022. Three Arrows Capital had borrowed more than $2.3 billion from Genesis. The fallout from the disagreement between Gemini Earn and Genesis Global affects around 340,000 Gemini earn customers.
DCG on the brink of collapse
Meanwhile, DCG is also considering selling off a portion of its approximately $500 million in venture capital assets, including 200 cryptocurrency-related enterprises, exchanges, banks, and custodians spread over at least 35 nations.
One of the sources also mentioned that DCG’s venture investments were illiquid and would take some time to sell, which would be problematic given the fact that investors have been hesitant to back new ventures since the FTX collapse and the global economic slump.
Earlier this week, DCG CEO Barry Silbert informed shareholders that the company had just shut down its wealth management division and laid off 30 percent of the staff at Genesis in an effort to decrease expenses.
Furthermore, DCG also saw calls from Gemini’s co-founder Cameron Winklevoss for the removal of DCG CEO Barry Silbert earlier this week amidst tensions between the high-profile executives.