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DCG Starts Selling its Assets to Pay off Debtors

The crypto currency assets of the conglomerate Digital Currency Group (DCG) have just been put up for sale, and the company is offering hefty discounts on these sales.

Photo by Artem Beliaikin / Unsplash

The crypto currency assets of the conglomerate known as Digital Currency Group (DCG) have just been put up for sale, and the company is offering hefty discounts on these sales.

According to a recent article (1) by the Financial Times, the action is part of the business's efforts to generate sufficient funds to balance the amount owing to creditors of its insolvent lending arm Genesis.

The Genesis division of the group was responsible for lending money to customers. The newspaper received this information from the United States Securities and Exchange Commission filings.

The Digital Currency Group is Eager to Protect Its Business by Selling Off Its Holdings

The choice that Digital Currency Group has made to sell its holdings, which are now managed by digital assets manager Grayscale, a subsidiary, can primarily be attributed to a commercial plan.

The collective asserts:

"This is merely a part of the regular rebalancing of our portfolio," she said.

The conglomerate is experiencing significant financial difficulties at the moment and is placing a primary emphasis on protecting the cash-generating aspects of its business.

But the situation has become direr ever since one of its companies, the crypto currency lender Genesis Global, submitted a petition for protection under Chapter 11 of the US Bankruptcy Code in New York last month.

Even more so, considering that the US firm now owes well over $3 billion to its creditors directly due to the bankruptcy.

According to reports, the organization has started to consider selling all or part of its news website, CoinDesk.

In addition, another rumor stated that Digital Currency Group intends to disclose part of its $500 million worth of venture portfolios shortly. On the other hand, its most recent alternative is Digital Currency Group's choice to sell the shares it now holds with Grayscale.

Filings expose that the recent share sale has centered more on the Ethereum fund, which has moved to sell approximately a quarter of its stock to raise as much as $22 million across several trades. In the meantime, filings reveal that the recent share sale has focused more on the Ethereum fund.

Interestingly, the company is selling the shares at around $8 apiece, a big discount from the claim that each share is worth $16 of ether. On the other hand, that might be fine for Digital Currency Group.

Grayscale administers the Grayscale Bitcoin Trust (GBTC), which now has over $10 billion in assets that are being managed.

Grayscale Bitcoin Trust is continuously reducing in value as depicted in the graph. Graph Source: FT (1.1)

It receives a management fee of 2.5% on the approximately 3 million ETH held in the Ethereum Trust and 2% on the BTC stored in the Bitcoin Trust.

Grayscale's Ethereum Trust Value has halved in Value (2.1)

Additionally, the company is selling less significant chunks of shares in its Bitcoin Cash Trust, Litecoin Trust, Ethereum Classic Trust, and Digital Large Cap Fund.