Digital Currency Group Suspends Dividends Amid Regulatory Trouble With Subsidiary Genesis

According to a shareholders’ missive from Digital Currency Group (DCG) viewed by concern and crypto work Coindesk, the institution has suspended dividends until further notice. This quality follows the U.S. Securities and Exchange Commission (SEC) charging a subsidiary steadfast of DCG, Genesis Global Capital, with operating an “unregistered connection and merchantability of securities to retail investors.”

Digital Currency Group Takes Steps to Strengthen Balance Sheet by Suspending Dividends

On Jan. 17, 2023, Coindesk newsman Ian Allison published an article disclosing that the Digital Currency Group (DCG) is suspending dividend payments for the clip being. It is worthy noting that Coindesk, a fiscal crypto-focused quality outlet, is an “independent operating subsidiary” of DCG. Allison’s study cites a shareholders’ missive reviewed by the publication, which notes that the determination was made successful effect to the “current marketplace environment.”

DCG added that the steadfast has “been focused connected strengthening our equilibrium expanse by reducing operating expenses and preserving liquidity — As such, we person made the determination to suspend DCG’s quarterly dividend organisation until further notice.”

The Coindesk nonfiction follows the problems the crypto lending subsidiary of DCG, Genesis Global Capital, has been dealing with implicit the past 2 months. On Nov. 16, 2022, Genesis’s lending portion suspended withdrawals and caller indebtedness originations. It was past reported that Genesis owes Gemini Earn customers $900 million, and arsenic a result, Gemini besides paused withdrawals and precocious unopen down the Earn program. Additionally, reports elaborate that Genesis was being probed by U.S. regulators, and Gemini formed a committee with Houlihan Lokey to resoluteness the Genesis liquidity issues.

Later, Gemini co-founder Cameron Winklevoss wrote a critical unfastened letter astir the subject, and past followed up with another unfastened letter insisting that the DCG committee region Barry Silbert from his relation arsenic DCG’s CEO. Silbert responded with a missive addressed to DCG shareholders, successful which helium dismisses galore of the claims made by Winklevoss. The pursuing day, some Gemini and Genesis were charged by the U.S. Securities and Exchange Commission (SEC) with conducting an unregistered offering.

DCG owns a immense portfolio of crypto companies, including Coindesk, Foundry USA, Grayscale Investments, and Genesis Global Capital. All of these companies are large players successful the space; for example, Foundry USA is the largest bitcoin mining pool successful presumption of hashrate, and Grayscale manages the largest Bitcoin Trust (GBTC) successful the crypto industry.

What bash you deliberation astir the suspension of dividends by Digital Currency Group? Let america cognize what you deliberation astir this taxable successful the comments conception below.

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