Jan 12 (Reuters) – (This Jan. 12 story has been corrected to indicate that Genesis World Capital, and never its crypto lending arm, mentioned in November it will halt transactions, in paragraph 7)
U.S. crypto firm Digital Foreign money Group (DCG) is on the middle of the trade's newest meltdown after one among its corporations, Genesis, froze buyer withdrawals in November.
Genesis mentioned it's working to keep away from a chapter, however traders worry its collapse might deliver down different related corporations and initiatives.
Here's what we all know in regards to the many corporations Digital Foreign money Group owns:
COINDESK
DCG acquired crypto information web site CoinDesk in 2016 after beforehand investing within the outlet. TechCrunch on the time pegged the deal as being value about $500,000 to $600,000.
CoinDesk in November published a leaked steadiness sheet of Alameda Analysis, the crypto buying and selling agency based by Sam Bankman-Fried. Many trade observers cited the report because the catalyst for the downfall of Alameda and Bankman-Fried's crypto trade FTX, which filed for chapter lower than two weeks later.
GENESIS
Genesis Buying and selling was initially the bitcoin buying and selling division at DCG Chief Government Barry Silbert's SecondMarket, however relaunched with its new title as a subsidiary of DCG when Silbert began the enterprise agency in 2015.
Genesis' crypto lending arm, Genesis World Capital, introduced in November it will cease making new loans and blocked prospects from withdrawing funds, citing the market dislocation attributable to the collapse of FTX.
Genesis World Capital had partnered with various different crypto corporations, together with crypto trade Gemini, to supply a crypto lending product. Gemini now says its prospects are owed $900 million from Genesis.
Genesis owes greater than $3 billion to its collectors together with Gemini, in line with an individual acquainted with the matter.
DCG itself owes $1.675 billion to Genesis' crypto lending arm, in line with a November letter Silbert despatched to shareholders. That features a $1.1 billion promissory notice that seems to be related with liabilities DCG assumed from Genesis after it was hit arduous by the collapse of Singapore-based crypto hedge fund Three Arrows Capital.
GRAYSCALE
Silbert began Grayscale Investments in 2013 after he stepped down as CEO of SecondMarket. After promoting SecondMarket to Nasdaq Inc (NDAQ.O) in 2015, he launched DCG, with Grayscale as one of many agency's subsidiaries.
Grayscale's flagship Grayscale Bitcoin Belief (GBTC) is the world's largest bitcoin fund, one which the corporate hopes will sometime be transformed into an exchange-traded fund.
GBTC has not traded at a premium relative to the worth of bitcoin, its underlying asset, since early 2021. DCG launched into an effort to scale back the low cost in 2021, saying a plan to spend as much as $1 billion to buy GBTC shares.
Troubles at Genesis' lending enterprise had no impression on DCG and its subsidiaries, DCG mentioned in November, whereas Grayscale mentioned its underlying belongings had been unaffected.
OTHER VENTURE CAPITAL INVESTMENTS
DCG is a prolific enterprise capital investor, itemizing greater than 160 corporations in its portfolio on its web site, of which it has acquired 28, it says. Crypto trade Luno and crypto mining and staking agency Foundry are listed as subsidiaries.
DCG can also be an investor in U.S. crypto exchanges Coinbase (COIN.O) and Kraken, and its different holdings embody the U.S. agency Circle, which runs the stablecoin USDC, and blockchain analytics corporations Chainalysis, Dune Analytics, Elliptic and Etherscan.
Reporting by Elizabeth Howcroft in London and Hannah Lang in Washington; Modifying by Lananh Nguyen and Matthew Lewis
: .