NewsletterDigital Currency Group Halts Quarterly Dividends Amid Genesis Lawsuit
Digital Currency Group (DCG) announced that it is suspending its quarterly dividend payouts, “until further notice” as it aims to preserve liquidity.
The firm cited that it is currently focusing on “strengthening our balance sheet by reducing operating expenses and preserving liquidity,” written in the letter shared with stakeholders dated Jan 17, as per a report by Bloomberg.
Genesis owes $3 billion to its creditors
Digital Currency Group’s crypto brokerage firm Genesis owes over 3 billion USD to its creditors. It halted the withdrawals on November 16, 2022, following the collapse of FTX. DCG is considering selling some of its assets to be able to compensate.
The ongoing scenario has pushed DCG into a battle with Gemini. Gemini’s co-founder Cameron Winklevoss asked to remove the CEO Barry Silbert in an open letter. According to Winklevoss, Gemini’s customers have been unable to access the 900 million USD since Genesis halted the withdrawals. Genesis owes this amount to Gemini. The co-founder also stated that DCG owes his firm over 1.6 billion USD, which has been denied by Silbert.
Also read: Sam Bankman-Fried Remains Firm That FTX US Is Still Solvent
SEC sues DCG’s subsidiary and Gemini
On January 12, SEC charged both Gemini and Genesis with an “unregistered offer and sale of securities to retail investors.” The SEC claims the asset lending program by Gemini “Earn” is a security. Both firms are accused to have raised billions of dollars worth of crypto assets through this lending program from thousands of investors.
FTX filed for bankruptcy on November 11 in the U.S. Its boss Sam Bankman-Fried is accused of money laundering, fraud, and violation of campaign laws. Arrested from the Bahamas, he was later extradited to the U.S. after SEC and the trade commission charged him with 8 financial crimes. Bankman-Fried pleaded not guilty, however, his two counterparts Gary Wang and Caroline Ellison accepted the charges.
Also read: This Crypto-Focused Bank Lost $1 Billion Due To FTX Collapse
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