According to the FT, which cited sources with knowledge of the situation, DCG, the subsidiary of Genesis, which also owns the cryptocurrency news organization CoinDesk and the investment adviser Grayscale, has a sizable inventory worth $500 million that it could liquidate to generate money.
The corporation may need to sell some of its assets, which include 200 crypto-related businesses spanning 35 nations, as a consequence of the firm's unsuccessful hunt for new external investment.
The cryptocurrency exchanges Coinbase, Kraken, and Blockchain.com are among its most well-known assets. DCG CEO Barry Silbert stated this week in a shareholder letter that the company also made a $250,000 investment in FTX.
As Genesis and DCG and the cryptocurrency exchange Gemini, established by Cameron and Tyler Winklevoss of The Social Network fame, continue to spar, the enormous amount due to debtors becomes public.
Gemini co-founder Cameron Winklevoss has asked that Silbert pay $900 million that Winklevoss believes Genesis owed to 340,000 of the crypto exchange's users in two letters that have been published since the beginning of the year. Later, he demanded Silbert's dismissal as CEO.
The cryptocurrency exchange provided consumers with rewards of around 8% for borrowing their cryptocurrency through Gemini's Earn program, which it debuted in 2021. By lending money from the clients to Genesis, who then leased it to investment firms, large yields were obtained. Earn was discontinued by Gemini on January 8th.
Following the insolvency of the crypto investment firm Three Arrows Capital (3AC), to whom Genesis had lent $2.4 billion last summer, Genesis was taken off guard. Genesis asserts that 3AC provided 80% of the loan's security, although others estimate that the amount to be closer to 50%. Genesis was once more affected by the bankruptcy of FTX in November. Genesis claimed to hold $175 million in cash on hand, in addition to some other $7 million with FTX's associated market-maker Alameda Research.
Due to these deficiencies, DCG was forced to take over some of Genesis's obligations in the shape of a $1.1 billion promissory note. Nevertheless, the Genesis loan platform stopped accepting deposits in November after failing to find any buyers for “at least” $1 billion in additional cash. Moelis & Company, a “restructuring counsel,” was retained by Genesis to consider every alternative, even going bankrupt.
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