DCG Sells Shares in Grayscale Crypto Trusts at Steep Discount to Raise Funds for Genesis Creditors

DCG focuses on the Ethereum trust and sells $8 per share, despite each share’s claim to $16 of ether.

A man in a suit with huge glasses cover almost all of his face
  • The Financial Times reported that DCG had sold its shares in several Grayscale crypto trusts, focusing on the Ethereum fund.
  • DCG sells its shares at about $8, while each share’s claim is $16 of ether.
  • DCG has sold around a quarter of its stock in the Ethereum fund, raising around $22 million.
  • It’s unclear whether DCG has sold any of its Grayscale Bitcoin Trust (GBTC).
  • DCG agreed with Gemini on Monday to repay Genesis’ $900 million debt to Gemini Earn users.

Digital Currency Group (DCG) continues looking for ways to raise funds to help its bankrupt lending units under the crypto broker Genesis.

According to a report by the Financial Times, DCG has sold its shares in several Grayscale crypto trusts. Grayscale is also DCG’s subsidiary. DCG has sold its shares at a deep discount: About $8 per share, despite each share’s claim to $16 of ether.

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DCG’s share selling has focused on the Ethereum fund, where the conglomerate has sold about a quarter of its stock to raise around $22 million.

However, whether DCG has sold any of its shares in the Grayscale Bitcoin Trust (GBTC) is also unknown. The fact that DCG, a parent to Grayscale, is one of the holders of GBTC shares has been a potential reason why the U.S. Securities and Exchange Commission (SEC) has been reluctant to approve Grayscale’s Bitcoin ETF.

At the same time, while it’s unclear how much funds DCG will raise selling the shares, the company has already found a way to repay Genesis’ debt to Gemini.

DCG Reaches Agreement with Gemini

DCG has been actively trying to raise funds to help Genesis repay its creditors. DCG is currently looking to sell its media outlet CoinDesk. It has also sold part of its crypto venture portfolio holdings, which amounted to around $550 million.

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Genesis, which filed for Chapter 11 bankruptcy a few weeks ago, owes its creditors around $3.5 billion. This includes the $900 million owed to crypto exchange Gemini’s users who’ve been waiting to get their funds back since November last year. 

However, Genesis seems to have found a way to repay Gemini users. The two companies agreed on Tuesday to see DCG swap its $1.1 billion note due in 2032 for convertible preferred stock. DCG will also refinance its existing loans due in 2023 for new loans of an aggregate value of $500 million.

On the Flipside

  • It’s unclear how much more DCG will be able to raise with these share sales at steep discounts.

Why You Should Care

The Genesis story seems to have taken a more positive turn lately. With DCG aggressively looking at ways to raise funds to help Genesis, users affected by the bankruptcy might get back the majority of their funds if everything goes well.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Arturas Skur

Arturas Skur is a cryptocurrency news reporter at DailyCoin who covers Web 3.0 domains, DeFi, and Ethereum Layer-2s. With over five years of experience in journalism and public relations, Arturas brings his critical thinking and analytical abilities to deliver insightful news stories. In his free time, he enjoys hiking, playing with his dog, and reading.