Genesis Owes Clients $3B, DCG Seeks to Offload Assets: Report

Genesis owes $3 billion to creditors, including $900 million to Gemini customers and more than $301 million to the users of the Dutch crypto exchange Bitvavo, according to FT. The crypto lender’s parent company DCG is considering offloading some of its crypto assets to raise money, though any outside investments are yet to materialize.

DCG Considering Selling Crypto Assets to Raise Capital

Crypto lender Genesis owes up to $3 billion to clients, and its parent company Digital Currency Group (DCG) is looking to offload assets to raise money, according to a report by FT, citing people familiar with the matter. The pursuit for fresh capital comes after Genesis took heavy blows in the wake of the FTX collapse in November.

The report says DCG is considering selling parts of its venture capital (VC) crypto assets such as exchanges, banks, and custody providers, among others. The VC company manages around 200 crypto-related projects across 35 countries, worth around $500 million, as per the FT.

The $3 billion, which Genesis owes to creditors, suggest that DCG is facing a tremendous fundraising task, particularly after the VC company failed to lure enough outside investors amid its struggles in the post-FTX era. To make things worse, DCG is involved in a messy dispute with the Winklevoss twins, owners of the crypto exchange Gemini which uses Genesis in its lending program.

Earlier this week, Gemini CEO and co-founder Cameron Winklevoss accused DCG of defrauding its Earn users and urged its board to remove Barry Silbert as the group’s CEO. Winklevoss said more than 340,000 Gemini and Earn users were affected.

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Genesis Owes $1.2B to Gemini and Bitvavo Users

DCG’s Genesis, one of the biggest crypto lenders, halted withdrawals in November 2022 following the FTX fiasco that sent shockwaves through the crypto industry. Genesis stopped the withdrawals due to “unprecedented market turmoil.”

The crypto lending firm has hired investment bank Moelis to help it get back on its feet, though talks for outside fundraising are yet to materialize. On Tuesday, DCG CEO Silbert said the group had laid off 30% of its staff at Genesis and shut down its wealth management unit to cut costs.

According to the FT, Genesis currently owes $900 million to Gemini customers and more than $301 million to the users of Dutch crypto exchange Bitvavo, which rejected DCG’s proposal of partial debt repayment on Jan. 11. The group also owes money to customers of crypto savings firm Donut.

Do you think DCG will manage to raise enough capital to cover the debts? Let us know in the comments below.