Digital Currency Group owes $575 million to Genesis Trading’s crypto lending arm By Reuters
© Reuters. FILE PHOTO: Depictions of virtual cryptocurrencies are placed on US dollar banknotes in this illustration taken November 28, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
By Hannah Lang
(Reuters) – Venture capital firm Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis’ crypto lending arm, the chief executive said Barry Silbert in a letter to shareholders Tuesday afternoon.
Loans from Genesis Global Capital, which suspended customer withdrawals last week, were used to “fund investment opportunities” and buy back shares from non-employee shareholders, Silbert said in the letter, which was seen by Reuters. This debt is due in May 2023, he added.
Besides the money owed to Genesis, Digital Currency Group’s only debt is a $350 million credit facility from a “small group of lenders” led by investment firm Eldridge, along with a $1 claim. $.2 billion filed in July against the bankrupt crypto hedge fund Three Capital of the Arrows. Digital Currency Group (DCG) had assumed this responsibility from Genesis.
DCG is still on track to make $800 million in revenue this year, Silbert said.
In suspending redemptions and suspending new loans, Genesis Global Capital cited the “unprecedented market turmoil” that rippled through the market after crypto exchange FTX filed for bankruptcy. At the time, DCG said the halted withdrawals at Genesis had no impact on its operations or subsidiaries.
Silbert also told shareholders he appreciated the words of support “as well as the offers to invest in DCG” and that he would let investors know if the company decides to do a financing round. Genesis is looking to raise up to $1 billion and has approached crypto exchange Binance and asset manager Apollo Global Management (NYSE:) for help, The Wall Street Journal reported on Monday.