December 4, 2022

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Digital Currency Group owes $575 million to Genesis Trading By Reuters crypto lending arm

2 min read

©Reuters. FILE PHOTO: Representations of virtual cryptocurrencies are placed on US dollar banknotes in this November 28, 2021 illustration. REUTERS/Dado Ruvic/Illustration/File Photo

By Hannah Lang

(Reuters) – Venture capital firm Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million on Genesis’ crypto lending arm, Chief Executive Barry Silbert said in a letter to shareholders on Tuesday afternoon.

Loans from Genesis Global Capital, which suspended customer payouts last week, were used to “fund investment opportunities” and buy back stock from non-employee shareholders, Silbert said in the letter, seen by Reuters. That debt is due in May 2023, he added.

Aside from the money owed to Genesis, Digital Currency Group’s only debt is a $350 million credit facility from “a small group of lenders” led by investment firm Eldridge, and a claim for of $1.2 billion it filed in July against bankrupt crypto hedge fund Three Arrows Capital. The Digital Currency Group (DCG) had assumed this liability from Genesis.

DCG is still on track to hit $800 million in revenue this year, Silbert said.

In suspending repayments and halting new lending, Genesis Global Capital cited the “unprecedented market turmoil” that gripped the market after crypto exchange FTX filed for bankruptcy. At the time, DCG said the halted redemptions at Genesis had no impact on its operations or subsidiaries.

Silbert also told shareholders that he appreciates words of support “along with offers to invest in DCG” and that he would notify investors if the company elects to raise funds. Genesis is aiming to raise up to $1 billion and has reached out to crypto exchange Binance and asset manager Apollo Global Management (NYSE:) for support, The Wall Street Journal reported Monday.

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