DCG is debt-free, minus its $1.1 billion promissory note to Genesis, as of June

Digital Currency Group, the blockchain investments juggernaut founded in 2015, has fully repaid its short-term debts as of June, the company announced in a quarterly shareholder letter this week. 

The company repaid more than $1 billion to creditors over the past 18 months and was particularly buoyed by a strong performance in the first half of the year. 

Its only remaining debt is a $1.1 billion promissory note due to its bankrupt crypto-lending unit Genesis in 2032. 

DCG and its subsidiary Genesis were implicated in the market contagion event in 2022, particularly by the collapse of hedge fund Three Arrows Capital and crypto exchange FTX. 

Genesis had loaned several billion dollars worth of assets to 3AC, leading to losses when Su Zhu and Kyle Davies’ trading empire collapsed. DCG helped its subsidiary stay in business by lending it cash and presenting it with the $1.1 billion promissory note. 

But when FTX and sister firm Alameda Research collapsed months later in November, Genesis was forced to close withdrawals and enter into bankruptcy. 

In October 2023, Attorney General Letitia James filed a sweeping lawsuit against cryptocurrency companies Gemini, Genesis and DCG for allegedly lying to investors , which the firms contest . A bankruptcy judge has approved a $2 billion settlement between the NYAG's office and Genesis in May.

The shareholder letter notes that Genesis and DCG have been able to fully repay the majority of Genesis’ creditors — including crypto exchange Gemini, which had lent Genesis its customer deposits from its “Earn” program — since disbursements began in August. The Block was the first to report that Genesis had completed its restructuring plan. 

“Over 99% of the more than 200,000 Genesis claimholders are receiving a full recovery. In addition, the majority of crypto claimholders who are not receiving a full in-kind recovery are nevertheless receiving significant recoveries which in most cases represent returns in excess of 100% relative to petition date prices,” DCG wrote.

“We are pleased with this outcome, which represents an extraordinary recovery for any bankruptcy,” the firm added. 

Grayscale

While DCG is working to close “the chapter” on Genesis, a new one has begun for its asset management division Grayscale. Grayscale was one of the firms in the first quarter to launch a spot bitcoin exchange-traded fund and a spot ETH fund in Q2 by converting its closed-end BTC and ETH trusts to ETFs. 

“This year, Grayscale launched 9 new products, including BTC and ETH Mini products, which have seen inflows of over $270 million and over $220 million respectively,” DCG wrote. Grayscale also launched a number of single-asset trusts tracking assets like Bittensor.