Digital Currency Group halts dividends in an effort to preserve liquidity
Venture capital firm Digital Currency Group (DCG) has told shareholders it is halting its quarterly dividend payments until further notice as it attempts to preserve liquidity.
According to the letter sent to shareholders on Jan. 17, the firm is focused on “strengthening our balance sheet by reducing operating expenses and preserving liquidity.”
Its financial issues are derived from the woes of its subsidiary, crypto broker Genesis Global Trading, which reportedly owes creditors more than $3 billion and DCG is also considering selling some of the assets within its portfolio.
Customers are currently unable to withdraw funds from Genesis after it halted withdrawals on Nov. 16, which has prompted Cameron Winklevoss — on behalf of his exchange Gemini and its users with funds on Genesis — to call for the board of DCG to remove Barry Silbert as CEO of the firm in a Jan. 10 open letter.
Earn Update: An Open Letter to the Board of @DCGco pic.twitter.com/eakuFjDZR2
According to Winklevoss, Genesis owes Gemini $900 million for funds that were lent to Genesis as part of Gemini’s Earn program, which offers customers the ability to earn an annual yield of up to 7.4%. He also claimed DCG owed $1.675 billion to Genesis although DCG boss Barry Silbert denied this
Soon after, on Jan. 12, the United States Securities and Exchange Commission (SEC) poured fuel on the fire charging both firms with offering unregistered securities through the Earn program.
Related: Crypto Biz: DCG’s ‘carefully crafted campaign of lies’?
Genesis’ problems first became apparent on Nov. 16, when it halted customer withdrawals in the wake of the FTX fallout, citing “unprecedented market turmoil” which resulted in “abnormal” levels of withdrawals.
On Nov. 10, less than a
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