• Digital Currency Group (DCG) has suspended dividend payments until further notice
• This decision was made in response to the current market environment and to strengthen the company’s balance sheet
• The move follows issues with a subsidiary firm of DCG, Genesis Global Capital, being charged by the U.S. Securities and Exchange Commission (SEC) with operating an „unregistered offer and sale of securities to retail investors“
Digital Currency Group (DCG) has taken steps to strengthen its balance sheet by suspending dividend payments until further notice. This news follows the U.S. Securities and Exchange Commission (SEC) charging a subsidiary firm of DCG, Genesis Global Capital, with operating an „unregistered offer and sale of securities to retail investors“.
According to a shareholders‘ letter from Digital Currency Group (DCG) viewed by finance and crypto publication Coindesk, the company has suspended dividends until further notice. This decision was made in response to the „current market environment“ and to ensure the company remains in a strong financial position.
The news follows the problems the crypto lending subsidiary of DCG, Genesis Global Capital, has been dealing with over the past two months. On November 16, 2022, Genesis’s lending unit suspended withdrawals and new loan originations. It was then reported that Genesis owed Gemini Earn customers $900 million, and as a result, Gemini also paused withdrawals and recently shut down the Earn program. Furthermore, reports detailed that Genesis was being probed by U.S. regulators, and Gemini formed a committee with Houlihan Lokey to investigate the situation.
The suspension of dividends is yet another consequence of the legal and regulatory troubles faced by the Digital Currency Group. It is likely that the company will not reinstate dividend payments until the issues with its subsidiary have been resolved. The company’s shareholders have been informed of this decision, but the details of when and how the dividends will be reinstated remain unknown.
The Digital Currency Group is one of the largest players in the cryptocurrency industry, with investments in some of the most expansive crypto projects. It is unclear how the suspension of dividends will affect the group’s ability to invest in new projects. However, the suspension of dividends is a necessary step for the company to remain in a strong financial position as it deals with its legal and regulatory issues.