Digital Currency Group (DCG), the parent company of Grayscale and crypto lending platform Genesis, is posting a loss of $1.1 billion in 2022, according to a financial report sent to investors that media outlet Coindesk was able to see.
In the cryptocurrency industry, 2022 was a pivotal year where no one was spared. Falling cryptocurrency prices and repeated bankruptcies are the main reasons stated by the group.
Indeed, Digital Currency Group (DCG) CEO Barry Silbert announced in January that 2022 was the most difficult year of his life from a personal and professional perspective. The group known for its investments in the cryptocurrency world has just revealed a colossal loss.
According to its subsidiary CoinDesk, DCG has lost $1.1 billion over the past year. As of last December, the group’s total assets were worth $5.3 billion, including $262 million in cash. In its quarterly report to investors, DCG says its capital decline is related to the state of the cryptocurrency market and the resulting bankruptcies:
“In addition to the negative impact of the decline in Bitcoin (BTC) and cryptocurrency prices, last year’s results reflect the impact of the Three Arrows Capital (3AC) default on Genesis.”
Financial results that further indicate that DCG held only $262 million in cash at the end of 2022, and investment assets in the amount of $670 million.
Although the name Digital Currency Group is not particularly well known to the general public, the group has two subsidiaries that are regularly mentioned in the media: Grayscale and Genesis Capital.
As a reminder, Grayscale is the fund that holds tens of billions of dollars in Bitcoin, including 635,000 BTC stored at Coinbase Custody, under management for its clients.
Digital Currency Group’s financial report states that the $1.1 billion loss is the result of the impact of the bankruptcy of hedge fund Three Arrows Capital (3AC) on its subsidiary Genesis.
The Three Arrows Capital fund, currently in liquidation, owes $3.5 billion to its creditors (Celsius Network, BitGo, Algorand, CoinList, Galaxy Digital, DCG, Voyager Digital), astronomical amounts that they will never see again, click here to read our article on this subject.
Digital Currency Group (DCG) also says that its losses have been compounded by the fall in the Bitcoin price and the overall crypto market.
