Digital Currency Group Sells Shares in Subsidiary's Crypto Funds
The cryptocurrency conglomerate known as Digital Currency Group (DCG) is apparently getting ready to generate cash and maintain its liquidity by selling its assets in cryptocurrency funds that are managed by a subsidiary of the company known as Grayscale Investments.
According to a report that was published on February 7 by the Financial Times, which cited United States securities filings, DCG sold approximately one quarter of its shares in Grayscale's Ether (ETH)-based fund for approximately $8 per share, despite the fact that each share held a claim to nearly double that amount in ETH. The filings were cited in the report.
In addition to this, it is said to have sold down small share parcels in Grayscale's Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum Classic (ETC)-based trusts. This is in addition to its Digital Large Cap Fund, which is a single fund that invests in Bitcoin (BTC), Ether, Polygon (MATIC), Solana (SOL), and Cardano (ADA).
The response that DCG gave when queried about the share sales was that "it is just part of our regular portfolio rebalancing."
In spite of this declaration, there are others who feel that Barry Silbert's DCG might be heading for some kind of financial difficulty.
Another of its companies, the cryptocurrency lending business Genesis Global Capital, filed a bankruptcy petition on January 19 and is reported to owe its creditors more than $3 billion.
Companies controlled by DCG have been significantly impacted by the contagion that has resulted from FTX's downfall. Over the last several weeks, these companies have been forced to let go of over 500 people.
However, DCG has taken a number of actions to maintain liquidity in 2023, such as informing its shareholders in a letter dated January 17 that it would be discontinuing its quarterly dividend payments as it seeks to improve its balance sheets. This was one of the many initiatives that DCG has done.
After stating that it had received offers for the cryptocurrency media outlet CoinDesk that were greater than $200 million, DCG has reportedly sought the assistance of the financial advisory firm Lazard in order to assist it in weighing up options to sell CoinDesk, which is another of its subsidiaries.
According to the company's website, DCG's venture capital portfolio includes about 200 crypto-related startups, some of which include Grayscale, Genesis, and CoinDesk. Additionally, DCG has interest in a number of other businesses, such as the cryptocurrency exchange Luno and the advising company Foundry.