Digital Currency Group (DCG) is considering selling some of its assets in light of the billions of dollars its subsidiary Genesis owes creditors.
A Thursday report from the Financial Times, citing sources familiar with the matter, disclosed that Genesis owes more than $3 billion to its creditors.
This significant amount of debt on the balance sheet has led parent company DCG to evaluate its options to raise capital to make the embattled lender whole. One of these options includes selling some of its assets from its portfolio of venture investments.
According to the report, DCG is considering offloading a part of its $500 million venture portfolio which consists of 200 crypto firms, including exchanges and banks, across 35 countries.
DCG backs some of the largest crypto companies operational today, having provided funding for major crypto exchanges like Coinbase and Kraken, and the USDC stablecoin issuer Circle.
However, some of these venture investments may not be quite as easy to sell. The sources said that the nature of DCG’s stake in its venture companies were illiquid and a sale would likely take some time – a luxury that DCG doesn’t have in its current scenario.
The firm shut down its wealth management division called HQ earlier this month, which had over $3.5 billion in assets under management. HQ’s senior executives were reportedly caught off-guard by the division’s closure.
The controversy surrounding DCG, which also owns crypto investment firm Grayscale Investments and media publication CoinDesk, has escalated over the last few weeks. Gemini’s co-founder Cameron Winklevoss accused DCG CEO Barry Silbert of “bad faith stall tactics” in resolving Genesis’s liquidity issues, with the lender owing $900 million to users of the crypto exchange’s yield-bearing product Gemini Earn.
On Thursday, both Genesis and Gemini were named in a lawsuit filed by the U.S. Securities and Exchange Commission. The regulator alleged that the firms had conducted an unregistered securities offering to retail investors through Gemini’s Earn product.
