The crypto-focused conglomerate Digital Currency Group (DCG) published its annual report on February 27, 2022. The report covered the year 2022.
The significant correction in the cryptocurrency industry, combined with the business’s restructuring of its Genesis loan platform, resulted in the company reporting a net loss of $1.1 billion.
DCG’s revenue for the fourth quarter came in at $143 million, while the company incurred a loss of $24 million.
During this time, DCG was experiencing significant difficulties due to a liquidity crisis brought on by withdrawals at its cryptocurrency lending business Genesis Global.
The total revenue for the entire year came in at $719 million after consolidation.
The cryptocurrency industry titan published (1) the following in its research, which CoinDesk was able to obtain:
“In addition to the detrimental impact of [bitcoin] and cryptocurrencies price drops, the effect of the Three Arrows Capital (TAC) defaults upon Genesis can be seen in the previous year’s performance.”
According to DCG’s consolidated balance sheet as of December 31, 2022, the company had a total asset value of $5.3 billion. This comprises a total of 262 million dollars in cash and cash equivalents.
Furthermore, the company has capital assets worth $670 million, including Grayscale trusts shares, coins, investments in venture and fund capital, and other investments.
As per DCG, the remainder of the assets belong to the Grayscale and Foundry divisions.
A representative from DCG emphasized that the valuation of the venture portfolio and the investment assets had been adjusted to reflect current market conditions.
According to the company’s annual independent share price findings, DCG’s equity is currently valued at $2.2 billion, and the price per share is $27.93.
According to the additional information included in the paper, “this appraisal is broadly consistent with the sector’s 75%-85% decrease in equity prices during that same period.”
The Process Of Reorganization Being Undertaken By DCG
The liquidity crisis occurring at Genesis Global in 2022 was one of the greatest obstacles that the Digital Currency Group (DCG) had to overcome that year. The failure of the cryptocurrency exchange FTX in November 2022 caused Genesis to experience huge withdrawals, which forced the company to halt the service after a certain point temporarily. A decision to seek protection under Chapter 11 bankruptcy was made by Genesis late last month.
Despite these obstacles, DCG said it had “reached a significant milestone” in the reorganization of Genesis.
In addition, it brought attention to the non-binding contractual agreement made between some of the principal creditors.
As part of this deal, the company’s commitment to Genesis Capital, estimated to be worth roughly 600 million dollars, will have its maturity date pushed back to June 2024.
Another component of the reorganization is the controversial promissory note held by DCG in the amount of $1.1 billion due this year.
This will be considered before issuing a new class of convertible shares to creditors of Genesis Capital.
With any luck, DCG will be able to breeze past the difficulties ahead in 2023.