In an important step towards financial stability, DCG announced that it has completed repayment of all short-term loans, totaling more than $1 billion.
Genesis received about $700 million of that amount.
DCG – a major player in supporting emerging financial systems – plans to move forward as it pledges to make financial commitments.
Last month, DCG founder Barry Silbert resigned from Grayscale’s board of directors. The move was preceded by expectations of a decision on the Bitcoin exchange-traded fund from the US Securities and Exchange Commission (SEC). Silbert’s resignation, revealed in a filing with the Securities and Exchange Commission, led to Mark Shifke assuming the role of new president.
This change, along with board appointments, is preceded by legal challenges, including a billion-dollar fraud suit brought by New York Attorney General Letitia James.
In a legal development, a judge ruled that DCG cannot make ownership changes within Genesis until it successfully emerges from bankruptcy. This decision protects Genesis within DCG’s consolidated tax group, providing certain benefits during its bankruptcy.
The protections will remain in effect until the effective date of the Chapter 11 plan or potential transition to Chapter 7 status, underscoring the importance of DCG maintaining a greater than 80% interest to preserve potential value.
In October 2023, DCG announced a 23% increase in third-quarter revenue to $188 million due to the recovery of the cryptocurrency market. Large payments to bankrupt cryptocurrency lender Genesis were also mentioned. The market rebound at that time was partly attributed to the expectation that Bitcoin ETFs would be approved by U.S. cryptocurrency regulators.
There appear to be some positive financial signs for the company, however, Genesis Global Trading, a subsidiary of DCG, has decided to discontinue spot cryptocurrency trading operations due to undisclosed “business reasons.”
The move came after Genesis Global Holdco filed for bankruptcy in January 2023, as its specialized service was providing cryptocurrency lending.
Despite the pause, Genesis Global Trading confirms the continuation of its spot and derivatives trading services through GGC International, a trading company registered in the British Virgin Islands.