Digital Currency Group Suspends Dividend Amid Regulatory Issues With Genesis Subsidiary

According to the shareholders' letterDigital Currency Group (DCG),which the financial and cryptocurrency publication reviewedcoindeskThe company has suspended dividend payments until further notice.

This news came after the US Securities and Exchange Commission (SEC) accused subsidiary DCG,Genesis Global Capital,in conducting “unregisteredoffers and sales of securities to retail investors”. Digital Currency Group is taking steps to strengthen its balance sheet by suspending its dividend on January 17, 2023. Accordingly, we have decided to suspend the payment of DCG's quarterly dividend until further notice. The Coindesk article follows DCG subsidiary Genesis Global Capital's challenges in crypto lending over the past two months.

November 16, 2022 credit divisionGenesis put withdrawals and new loans on hold. Then it became known that Genesis owed $900 million to Gemini Earn customers, which caused Gemini to put withdrawals on hold and recently ended the Earn program. In addition, Genesis was reported to be under scrutiny by US regulators, and Gemini has formed a committee with Houlihan Lokey to address Genesis liquidity issues.

Later Gemini co-founder Cameron Winklevosswrote a critical open letter on the matter, followed by another open letter pushing for the DCG board to remove Barry Silbert as DCG CEO. Silbert responded with a letter addressed to DCG shareholders in which he dismissed many of Winklevoss' claims. The next day, both Gemini and Genesis were indicted by the U.S. Securities and Exchange Commission (SEC) for conducting an unregistered offering.

DCG owns an extensive cryptocurrency portfoliocompanies including Coindesk, Foundry USA, Grayscale Investments and Genesis Global Capital. All of these companies are major players in the market; for example, Foundry USA – the largest Bitcoin mining pool by hashrate, and Grayscale operates the largest Bitcoin Trust (GBTC) in the crypto industry.