Factbox: Many companies in the digital currency group’s crypto empire

Jan 12 (Reuters) – U.S. cryptocurrency company Digital Currency Group (DCG) is at the center of the industry’s latest downturn after one of its companies, Genesis, stopped trading clients in November.

While Genesis says it is working to avoid bankruptcy, investors fear its collapse could destroy other related companies and projects.

Here’s what we know about the many companies that make up the Digital Currency Group:

CoinDESK

DCG acquired crypto news website CoinDesk in 2016. At the time, TechCrunch put the deal at between $500,000 and $600,000.

CoinDesk published the leaked balance sheet of Alameda Research, a crypto trading firm founded by Sam Bankman-Fried in November. Many industry observers cited the report as the reason for the collapse of Alameda and Banman-Fried’s crypto exchange FTX, which filed for bankruptcy less than two weeks ago.

Genesis

Genesis Trading was originally the secondary market bitcoin trading arm of DCGG CEO Barry Silbert, but relaunched as a subsidiary of DCG under the new name when Silbert launched The Venture Foundation in 2015.

Genesis Global Capital, the lending arm of Genesis Crypto, announced in November that it would stop issuing new loans and ban customers from withdrawing funds, citing market turmoil caused by the FTX collapse.

Genesis Global Capital has partnered with several crypto companies, including crypto exchange Gemini, to offer a crypto loan product. Gemini says its customers now owe Genesis $900 million.

Genesis owes more than $3 billion to creditors, including Gemini, according to a person familiar with the matter.

According to Silbert’s November letter to shareholders, DCG itself owes $1.675 billion to Jens’ crypto lending arm. That includes what appears to be a $1.1 billion charge-off note linked to alleged liability from Genesis after Singapore-based crypto hedge fund Three Arrows Capital collapsed and was hit hard.

Gray color

Silbert launched Grayscale Investments in 2013 after stepping down as CEO of Second Market. In the year After selling SecondMarket to Nasdaq Inc ( NDAQ.O ) in 2015, he launched DCG as one of its subsidiaries, Grayscale.

Greyscale’s flagship Grayscale Bitcoin Trust (GBTC) is the world’s largest bitcoin fund, which the company hopes will one day turn into an exchange-traded fund.

GBTC has not traded at a price relative to Bitcoin since early 2021. DCG announced plans to spend up to $1 billion to buy back GBTC shares in 2021 in an effort to reduce the offering.

Problems with Genesis’ credit business had no impact on DCG and its subsidiaries, DCG said in November, while Grayscale said its underlying assets were unaffected.

Other venture capital investments

DCG is a large venture capital investor that lists more than 160 companies in its portfolio on its website, of which it says it has acquired 28. Crypto exchange Luno and crypto mining and staking firm Foundry are listed as partners.

DCG is also an investor in US crypto exchanges Coinbase ( COIN.O ) and Kraken, while its other holdings include US company Circle, which manages stablecoin USDC, and blockchain analytics firms Chinalysis, Dune Analytics, Elliptic and Etherscan.

Reporting by Elizabeth Howcroft in London and Hannah Lang in Washington; Editing by Lananh Nguyen and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

Elizabeth Howcroft

Thomson Reuters

Reports on the intersection of finance and technology, including cryptocurrencies, NFTs, virtual worlds and money driving “Web3”.

.

Leave a Comment