The conglomerate is currently struggling financially and is focused on preserving its cash-generating business at the very least.
Crypto conglomerate Digital Currency Group (DCG) has started selling off some of its holdings, and it is doing so at a steep discount. According to a fresh report by the Financial Times, the move is part of the group’s efforts to raise enough capital to offset the amount owed to creditors of its bankrupt lending arm Genesis. This is according to the US securities filings obtained by the publication.
Digital Currency Group Keen on Preserving Its Business by Selling Its Holdings
DCG’s decision to sell its holdings that are being run by digital assets manager Grayscale – also a subsidiary, is largely a business strategy. The group says:
“This is simply part of our ongoing portfolio rebalancing.”
For what it’s worth, the conglomerate is currently struggling financially and is focused on preserving its cash-generating business at the very least. But since one of its subsidiaries, crypto lender Genesis Global, filed for Chapter 11 bankruptcy protection in New York last month, the crisis has intensified. More so, since the bankruptcy meant that the US group owes well over $3 billion to creditors.
To raise funds, the group reportedly began contemplating a full or partial sale of its news site CoinDesk. And another report suggested that DCG also plans to release some of its $500 million venture portfolios as well. However, DCG’s decision to sell shares being held with Grayscale appears to be its latest option.
Meanwhile, filings reveal that the recent share sale looks to be more focused on the Ethereum fund, where it has moved to sell about a quarter of its stock to raise as much as $22 million in several trades. Interestingly, the group is selling at about $8 per share – a significantly lower price than each share’s claim of $16 of ether. But that might not be a major concern to DCG.
Overall, Grayscale operates the Grayscale Bitcoin Trust (GBTC), which has $10 billion-plus in assets under management (AUM). It earns 2.5% management fee on about 3 million ETH in the Ethereum Trust and 2% on the BTC in the Bitcoin trust.
The group is also selling smaller blocks of shares in its Bitcoin Cash Trust, Litecoin Trust, Ethereum Classic Trust and Digital Large Cap Fund.