Venture capital firm Digital Currency Group (DCG) has stopped paying dividends to preserve liquidity.
As FTX filed for bankruptcy, Genesis announced that it had nearly $175 million stuck in FTX, which resulted in DCG sending an emergency capital infusion of $140 million to Genesis to address its liquidity issues. Genesis’ problems first came to light on November 16, when it stopped client withdrawals, citing unprecedented market turmoil in the wake of FTX’s collapse, which resulted in abnormal levels of withdrawals. The venture capital firm is taking new steps to meet the challenges.
DCG Will Not Distribute Dividends To Maintain Liquidity
Digital Currency Group, a venture capital firm that has stakes in more than 200 crypto projects, said it has stopped paying quarterly dividends as it tries to maintain liquidity.
The letter sent to the shareholders on 17 January included the following:
“The firm is focused on strengthening our balance sheet by reducing operating expenses and maintaining liquidity.”
Its financial problems stem from the woes of its subsidiary crypto broker Genesis Global Trading, which reportedly owes more than $3 billion to creditors. In addition, DCG is also considering selling some assets in its portfolio.
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