Digital Currency Group (DCG) Reports $1.1 Billion Loss in 2022 Due to Plunging Crypto Prices
Digital Currency Group (DCG), the cryptocurrency conglomerate, has reported a loss of $1.1 billion in 2022 due to the impact of plummeting cryptocurrency prices and the restructuring of its lending platform, Genesis.
The firm has attributed the loss to the Three Arrows Capital (3AC) default and the decline in cryptocurrency asset prices. In its fourth-quarter investor report, DCG has revealed that its consolidated balance sheet shows total assets of $5.3 billion as of December 31, 2022. The report further states that the remaining assets primarily consist of assets held by divisions Grayscale and Foundry.
DCG’s Q4 revenues were $143 million with losses of $24 million. However, the firm’s consolidated revenues for the full year were $719 million. In its annual independent stock valuation, DCG’s equity valuation was $2.2 billion, or a price per share of $27.93, which is in line with the sector’s 75%-85% decline in equity values over the same period.
Despite the challenges of the past year, DCG stated that it had “hit a milestone” in restructuring Genesis. The firm has entered into a nonbinding term sheet agreement with some of the main creditors, which involves extending the maturity of DCG’s May 2023 obligations to Genesis Capital of approximately $600 million (at current market prices) to June 2024.
Additionally, the agreement includes restructuring DCG’s $1.1 billion promissory note due in 2032 by issuing a new class of DCG redeemable, convertible preferred stock to Genesis Capital creditors. The report stated that negotiating definitive transaction documents and soliciting votes on a reorganization plan is expected to take several months.
DCG’s spokeswoman confirmed that all investment assets and the value of the venture portfolio have been marked to market, indicating that the assets have been valued based on their current market value. While the loss reported by DCG is significant, the firm’s efforts to restructure its lending platform and the agreement with its creditors indicate that it is taking proactive measures to address the challenges it faced in 2022.
Read more:
- Digital Currency Group (DCG) Has Started Selling Holdings In Grayscale
- Genesis Reaches Agreement In Principle With DCG And Key Creditors, Gemini Contributes $100 Million For Its Gemini Earn Users