Digital Currency Group (DCG), the parent company of Genesis, which is facing some financial difficulties, is selling off its investments. Chinese cryptocurrency mogul Justin Sun has pledged to invest a whopping $1 billion to purchase this network.
Sun, the creator of Tron, recently stated in an interview with Reuters his willingness to invest up to $1 billion in Digital Currency Group’s assets depending on DCG’s evaluation.
The temporary suspension of withdrawals
Genesis, a part of the DCG family, is currently facing approximately $3 billion worth of debt to its clients. Last November 16th, Genesis’s lending arm halted all withdrawals, citing “extreme market dislocation” as the reason for such action; this came after FTX filed for bankruptcy.
As such, Reuters needed help in assessing Sun’s fiscal standing. DCG, a $50 billion asset management company, is predicted to be worth around $10 billion next year. Currently, the calculations vary greatly on Sun’s net value, ranging from roughly $250 million to an estimated maximum of $3 billion, depending on which assets and digital currencies are considered.
Recently, Sun has pledged billions of dollars in relief to the fallen FTX and publicly declared his support for Binance’s Industry Recovery Fund.
Despite numerous demands for comments on the recent happenings and Sun’s apparent interest in buying the assets, DCG maintained its silence.
DCG is considering selling its assets
This month, Genesis–a subsidiary of DCG–announced that it would be slashing its workforce by 30% due to the current economic climate. Unfortunately, other Sun and DCG-affiliated firms are also suffering during these trying times.
In a public declaration released at the beginning of 2023, Gemini founders Cameron and Tyler Winklevoss asked Genesis to reimburse its $900 million debt owed to Gemini Earn. To further emphasize their point, Cameron even demanded that DCG CEO Barry Silbert resign from his post.
Consequently, Gemini Earn—a close partner of Genesis—ended withdrawals and officially closed on the same day as DCG’s subsidiary. This unfortunate closure was made official on January 8th.
Despite Silbert’s attempts to distance his company from Genesis’ difficulties, rumors suggest they are now looking into selling resources to clear its $3 billion debt. As we know, Genesis was among the first organizations impacted by the FTX outbreak and ended up halting payments on their loan platform during mid-November.
After further investigation, it became evident that the company had considered filing for bankruptcy and thus contacted restructuring specialists. There have also been rumors of their attempt to acquire $1 billion in rescue funds; however, a spokesperson from the firm declared these reports as outdated and confirmed they were having “quite positive negotiations” until late November.
