- DCG suspends dividends to strengthen balance sheet.
- Decision made in response to current market environment.
- Company faces financial difficulties at lending platform Genesis.
Digital Currency Group (DCG), a leading cryptocurrency conglomerate that owns companies such as CoinDesk, has informed its shareholders that it will be suspending dividends until further notice. This decision comes as the company is focusing on strengthening its balance sheet by reducing expenses and preserving liquidity in response to the current market environment.
In a letter sent to shareholders on Tuesday, DCG stated, "In response to the current market environment, DCG has been focused on strengthening our balance sheet by reducing operating expenses and preserving liquidity. As such, we have made the decision to suspend DCG's quarterly dividend distribution until further notice."
This move comes as the company has become embroiled in financial difficulties at its lending platform, Genesis. The owner of DCG, Barry Silbert, is currently in negotiations with billionaire entrepreneurs Cameron and Tyler Winklevoss, whose own crypto exchange, Gemini, was affected by the halt in customer withdrawals from Genesis, their lending partner.
The financial distress at Genesis has led to a ripple effect, causing difficulties for the Winklevoss twins and their exchange, Gemini. The brothers have been locked in negotiations with Silbert, as they had offered a lending product that fell apart due to the halt in customer withdrawals from Genesis.
A spokeswoman for DCG did not respond to a request for comment by press time. The company's decision to suspend dividends is a precautionary measure to ensure that it is in a strong financial position to navigate the current market environment. The company will continue to monitor the situation and will provide updates to shareholders as needed.