Crypto Conglomerate DCG Halts Quarterly Dividend Payments
Cryptocurrency giant, Digital Currency Group (DCG) has halted its quarterly dividend payments in an effort to conserve cash and improve its balance sheet.
DCG, parent company to the struggling cryptocurrency trading firm Genesis, and headed by Barry Silbert, has suspended the payout of its quarterly dividends according to a letter to shareholders seen by CoinDesk. DCG said in the shareholder letter:
In response to the current market environment, DCG has been focused on strengthening our balance sheet by reducing operating expenses and preserving liquidity. As such, we have made the decision to suspend DCG's quarterly dividend distribution until further notice.
DCG owns numerous crypto companies including Genesis, CoinDesk, and others.
DCG Under Severe Pressure
The company’s financial issues stem from the woes of one of its subsidiaries – crypto broker Genesis Global Trading, which reportedly owes its creditors over $3 billion. Early in January, Genesis laid off 30% of its workforce and is considering bankruptcy. Customer withdrawals are currently suspended after Genesis halted withdrawals on November 16.
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DCG CEO Barry Silbert, has been embroiled in negotiations with entrepreneurs Cameron and Tyler Winklevoss, whose crypto exchange Gemini offered a lending product called “Earn” in partnership with Genesis, but which has since fallen apart because Genesis halted withdrawals. Genesis halting withdrawals has prompted Cameron Winklevoss to call on the board of directors of DCG to remove Silbert as CEO of the firm. DCG is also reportedly under investigation by the United States Department of Justice (DOJ) and SEC for internal transfers between DCG and Genesis.
Genesis And Gemini Charged By The SEC
The United States Securities and Exchange Commission (SEC) last week charged Genesis and Gemini for allegedly selling unregistered securities. The charges relate to “Earn,” the high-yield product that promised customers yields of up to 8%. The SEC claims that Genesis loaned Gemini users’ cryptocurrencies and sent a portion of the profits back to Gemini, which then deducted an agent fee, sometimes over 4%, and returned the remaining profits to its users.
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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.