Digital Currency Group Clears Short-Term Debt of Nearly $1B

Blockchain investment behemoth Digital Currency Group (DCG) has paid off all of its short-term debts as of June.

Digital Currency Group (DCG) has cleared nearly $1 billion in short-term debt, according to a quarterly shareholder letter from the blockchain investment firm.

The company’s stellar performance in the first half of the year enabled it to repay its debtors almost $1 billion in the last 18 months. As of June, DCG has no outstanding short-term debt obligations except for a $1.1 billion promissory note.

The debt is linked to its crypto-lending business Genesis’s bankruptcy. In 2022, DCG and its affiliate faced the market contagion following the collapse of crypto exchange FTX and hedge fund Three Arrows Capital.

Battling Through Tough Times

When the trading empire of Su Zhu and Kyle Davies went down, Genesis lost a few billion dollars’ worth of assets that 3AC had borrowed from them. DCG stepped in to ensure its subsidiary could continue operations by providing the $1.1 billion promissory note and a cash loan.

However, Genesis was forced to halt withdrawals and file for bankruptcy in November after the collapse of FTX and its sister business Alameda Research.

In October 2023, New York Attorney General Letitia James hit three crypto firms—Gemini, Genesis, and DCG—with a massive lawsuit. The firms are now battling the allegations that they misled investors.

A bankruptcy court approved a $2 billion settlement between Genesis and the NYAG’s office in May.

According to the shareholder letter, since payments began rolling out in August, Genesis and DCG have repaid the majority of Genesis’ creditors. This includes cryptocurrency exchange Gemini, which had loaned Genesis client deposits from its “Earn” program.

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