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The venture capital firm focused on cryptocurrencies – Digital Currency Group (DCG) – reportedly marked a loss of $1.1 billion last year.
Some of the primary reasons for the downfall were the collapse of the crypto market and the bankruptcy of its subsidiary – Genesis.
- DCG – a crypto conglomerate shuttered by scandals and the bear market – disclosed in a report (seen by CoinDesk) that the turbulent 2022 resulted in a $1.1 billion loss for the company.
- It pointed out Genesis’ demise (a cryptocurrency lender under its umbrella) and the decline of bitcoin as the main factors behind the losses:
“In addition to the negative impact of [bitcoin] and crypto asset price declines, last year’s results reflect the impact of the Three Arrows Capital (TAC) default upon Genesis.”
- It is worth mentioning that Genesis was not the only DCG subsidiary that experienced some issues. The London-based digital asset platform Luno recently dismissed 35% of its employees, citing “the incredibly tough year for the broader tech industry and the crypto market.”
- DCG finished Q4 2022 with a loss of $24 million, while the revenue was $143 million. Consolidated revenue for the entire year reached $719 million.
- As of the end of December 2022, DCG held total assets of $5.3 billion, only $262 million of which were cash and cash equivalents.
- The company’s equity valuation hit $2.2 billion, while shares traded at nearly $28. “This appraisal is generally consistent with the sector’s 75%-85% decline in equity values over the same period,” it stated in the report.
- Contrary to the monetary loss, DCG restructured its $1.1 billion promissory note (due in 2032) and vowed to issue a new type of redeemable, convertible preferred stocks.
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- Source: https://cryptopotato.com/crypto-giant-dcg-revealed-a-loss-of-over-1-billion-in-2022-report/
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