The Digital Currency Group Is Reported To Lose Of $1.1 Billion In 2022

Key Points:

• Digital Currency Group (DCG) reported a loss of up to $ 1.1 billion in 2022, owing to the company’s challenges to reorganize its Genesis lending platform and the impact of the broader economic slump.
• The impact of Three Arrows Capital’s default on Genesis is reflected in last year’s financial performance.

By the end of 2022, Digital Currency Group (DCG) had just $262 million in cash and cash equivalents.

The Digital Currency Group (DCG) whale investment fund lost $1.1 billion in 2022 as the company battled to revamp its lending platform Genesis and deal with the effects of the recession. Based on CoinDesk report, a DCG-owned cryptocurrency website, the parent business had $5.3 billion in assets as of December 31, 2022. There are just 262 million USD in cash and equivalents. 670 million USD are invested assets, which include tokens, Grayscale Trust shares, and venture capital funds. The Grayscale and Foundry divisions own the majority of the remaining assets.

According to a DCG representative, all investment assets and venture portfolio valuations have been calculated at market value. The fourth quarter income of the investment fund launched in 2015, on the other hand, was 143 million USD, a loss of 24 million USD. The total revenue for the year was around $719 million. Nevertheless, the company’s equity is valued at $2.2 billion, or $27.93 per share. According to the analysis, this assessment is often consistent with a 75%-85% reduction in the industry’s equity value during the same time period. In addition to the negative impact of Bitcoin and decreasing crypto asset values, DCG claimed in its fourth-quarter report that last year’s financial performance included the impact of Three Arrows Capital’s default on Genesis.

Genesis is a cryptocurrency loan firm that was badly impacted by the FTX exchange’s collapse in November 2022, requiring withdrawals and declaring bankruptcy. At the time, the corporation owed up to 3.5 billion USD to its 50 biggest debtors. Notwithstanding last year’s difficulties, Digital Currency Group said earlier this month that all parties had reached common ground in rebuilding Genesis.

As a result, Genesis will convert $1.1 billion in assets promised to be lent by Digital Currency Group in the form of internal commercial paper expiring in 2032 into DCG preferred shares for creditors. This commercial paper is designed to rescue Genesis once the Three Arrows Capital fund declares bankruptcy in July 2022. Moreover, DCG will convert its $500 million loan at Genesis, which expires in May 2023, into two new loans with an interest rate of 11.5% on USD and 5% on Bitcoin, due in June 2024.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Chubbi

Coincu News