1 year ago
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The Financial Times (FT) reports that Digital Currency Group (DCG) is selling shares in crypto funds controlled by its subsidiary Grayscale at a steep discount. DCG explained it’s reorganizing portfolio.
According to the FT, the information comes directly from U.S. securities filings. DCG has sold about a quarter of its shares in Grayscale’s Ethereum fund for about $8 per share, despite each share costing about $16 in ether.
DCG has also moved to sell down smaller blocks of shares in Grayscale’s Litecoin Trust, Bitcoin Cash Trust, Ethereum Classic Trust and Digital Large Cap Fund, according to the filings.
The report comes days after news that DCG, Gemini, and Genesis’ major creditors reached an agreement on how to reorganize the bankrupt company. According to the agreement, which must still be approved by the court, DCG will sell trading and lending units to Genesis Global. To pay off the debt, DCG will restructure it. For a portion of the debt, it’ll issue a new loan maturing in June 2024. This loan will be repaid in both US dollars with an interest rate of 11.5% and bitcoin with an interest rate of 5%.
Related: DCG sells Genesis as part of bankruptcy reorganization plan
Apparently, the sale of Grayscale’s ether shares at a discount is due to DCG trying to support bankrupt Genesis. However, when asked why now, DCG said:
This is simply part of our ongoing portfolio rebalancing.
Grayscale is a subsidiary of DCG and an important asset. Grayscale makes a lot of money managing large pools of popular cryptocurrencies like bitcoin and ether for investors who buy shares through their brokerage accounts. DCG is selling some of its stake in one of Grayscale’s key trusts, although the shares in that trust have lost significant value over the past two years compared to the actual value of the cryptocurrencies it holds.
Related: Grayscale ETH trust sinks to 60% all-time low, GBTC to 45%
This is not DCG’s first attempt to preserve liquidity. Two weeks ago, the company laid off 500 employees.
Related: DCG cuts off 500 employees
3 weeks ago, it stopped paying of quarterly dividends to shareholders until further notice.
Related: Is DCG over?
And two months ago, DCG closed its wealth management subsidiary, HQ Digital.
Related: DCG shuts down its subsidiary
The latest report from FT echoes the report from a month ago in which FT said DCG is looking to sell some of the assets from its venture portfolio: DCG looking to sell assets to cover Genesis’ $3 billion deficit
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