Digital Currency Group (DCG), a leading venture capital firm in the crypto industry, has announced that it will be suspending its quarterly dividends until further notice.
The venture capital stated that it halts dividends quarterly to save cash and preserve its liquidity. The move was announced in a letter sent to shareholders on Jan. 17.
According to multiple sources, the firm is focused on strengthening its balance sheet by reducing operating expenses and preserving liquidity. DCG also mentioned that it is considering selling some of the assets within its portfolio.
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The company is facing financial difficulties stemming from the struggles of its subsidiary, crypto broker Genesis Global Trading. The branch reportedly owes creditors more than $3 billion. The firm's lending unit has stopped reimbursements. Additionally, it has warned that it may file for bankruptcy if it cannot raise funds in time.
Further, customers of a known crypto exchange, Gemini, have lost access to $900 million of funds placed with Genesis. Creditors, including Gemini, have been working behind the scenes to find a solution to Genesis's financial woes.
Due to the prolonged bear market, DCG cut 10% of its staff in a restructuring last year.
Meanwhile, US authorities are reportedly investigating the internal financial dealings of DCG. CEO of DCG, Barry Silbert, has sought to allay concerns, saying in a letter:
"<...> no doubt that DCG will emerge from this year a stronger company than ever before."
Time will tell whether focusing on preserving cash will be enough to steer the company through these difficult times.
In other news, National Geographic is to launch an NFT Collection named GM: Daybreak Around the World.
