Digital Currency Group (DCG) initiated the sale of its crypto funds controlled by Grayscale Investments, a subsidiary, to generate capital and maintain liquidity.
DCG Trying to Create Liquidity
On February 7, the Financial Times reported that DCG had sold around a quarter of its Ether-based Grayscale shares for approximately $8 each. Each share is worth almost double this amount in ETH. Moreover, small amounts of Litecoin-based funds have also been sold from Grayscale along with Bitcoin Cash and Ethereum Classic. Lastly, their Digital Large Cap Fund – which amalgamates Bitcoin Ether, Polygon, Solana, and Cardano on one platform – has likewise been unsold to some extent.
Digital Currency Group Officials Claim Everything Is Under Control
When questioned regarding the stock sales, DCG responded by stating that “it is merely a portion of our portfolio’s usual rebalancing process.” However, some skeptics opine that Barry Silbert’s Digital Currency Group may be on its way to an economic dispute. Likewise, one of their subsidiaries — crypto lending firm Genesis Global Capital — filed for bankruptcy and allegedly owed creditors over $3 billion on Jan 19th.
The FTX disaster has been an immense blow to the DCG‘s many businesses, leaving over 500 people jobless in weeks. To survive this difficult period and maintain liquidity for 2023, the company delivered a letter on January 17th revealing that it would temporarily suspend dividend payments for shareholders to enhance its financial outlook.
DCG Seeks Help to Recover the Situation
DCG, looking for extra resources to assess possible selling options after they received offers over $200 million, reached out to the renowned financial advisory company Lazard. Grayscale, Genesis, and CoinDesk just skim the surface of DCG’s venture capital portfolio – in reality, more than 200 crypto-affiliated companies come under their umbrella. As well as having ownership interests in organizations such as Luno cryptocurrency exchange and Foundry consultancy.
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