Digital Currency Group, a blockchain investment giant founded in 2015, announced in its quarterly shareholder letter this week that it had fully repaid its short-term debt as of June.
The company has repaid more than $1 billion to creditors over the past 18 months, buoyed by strong performance in the first half of the year.
The only remaining debt is a $1.1 billion promissory note from the bankruptcy of Genesis, a cryptocurrency lending arm, due in 2032.
DCG and its subsidiary Genesis were implicated in market contagion events in 2022, most notably the collapse of hedge fund Three Arrows Capital and cryptocurrency exchange FTX.
Genesis loaned billions of dollars worth of assets to 3AC, which led to losses as the trading empire of Kyle Davis and several others collapsed. DCG helped the subsidiary to continue its business by lending cash and providing $1.1 billion in promissory notes to the subsidiary.
But a few months later in November, when FTX and its sister company Alameda Research collapsed, Genesis halted withdrawals and went bankrupt.
In October 2023, Attorney General Letitia James filed a wide-ranging lawsuit against cryptocurrency companies Gemini, Genesis, and DCG, accusing them of lying to investors, which the companies disputed. A bankruptcy judge approved a $2 billion settlement between the NYAG office and Genesis in May.
The shareholder letter states that Genesis and DCG have been able to repay most of Genesis’ creditors (including cryptocurrency exchange Gemini) in full since payments began in August. Gemini lent Genesis customer deposits under its “Earn” program. Block First report Genesis announced that it has completed its restructuring plan.
“Over 99% of the over 200,000 Genesis claimants have received their full refund. Additionally, most crypto claimants who do not receive their full physical refund have nonetheless received significant refunds, in many cases representing returns in excess of 100% from the petition date price,” DCG wrote.
The company added: “We are delighted with this outcome, which represents a remarkable recovery from bankruptcy.”
Grayscale
While DCG is working to close the Genesis “chapter,” a new chapter is beginning for asset management arm Grayscale. Grayscale was one of the first to launch a spot Bitcoin Exchange-Traded Fund (ETF) in Q1 and a spot ETH fund in Q2, and has since converted its closed-end BTC and ETH trusts into ETFs.
“This year, Grayscale has launched nine new products, including BTC and ETH Mini products, which have attracted over $270 million and $220 million in inflows, respectively,” DCG wrote. Grayscale has also launched several single-asset trusts that track assets such as Bittensor.
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