Genesis owner DCG suspends dividend payouts

The decision marks Digital Currency Group’s latest attempt to preserve liquidity.

1 min read
Updated: January 18, 2023 at 2:06 am Genesis owner DCG suspends dividend payouts

Cover art/illustration via CryptoSlate

Genesis owner DCG suspends dividend payouts

Digital Currency Group (DCG) has discontinued dividend payments, according to the letter sent by the company to its shareholders on Jan. 17.

The company said in its letter that it has “made the decision to suspend [its] quarterly dividend distribution until further notice.” It is unclear whether those dividends were previously paid from the company’s general earnings or its crypto profits.

DCG cited its ongoing efforts to reduce operating costs and preserve liquidity during the poor crypto market as its reason for ending dividend payouts.

DCG has not publicly announced that it will discontinue dividends. The news was reported by DCG subsidiary CoinDesk, who obtained a shareholder letter copy. The company’s ongoing financial difficulties were already publicly known.

One subsidiary, Genesis, appears to be the main cause of DCG’s struggles. Genesis halted user withdrawals and loan redemptions in November. It also suspended withdrawals at Gemini Earn — a product offered in partnership with the crypto exchange Gemini that was officially discontinued last week.

Genesis also laid off 30% of its workers earlier this month. It reportedly owes $3 billion to creditors, and DCG is working to cover it.

However, financial stress likely exists throughout all of DCG. In recent weeks and months, the firm has shut down its wealth management subsidiary, HQ Digital, and discontinued interest-bearing accounts at its crypto wallet subsidiary, Lumo.

Journalist at CryptoSlate

Mike trained in library and information sciences before moving into crypto writing in 2018. He lives on the West Coast of Canada.

Posted In: Bankruptcy

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Genesis owner DCG suspends dividend payouts

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Source: cryptoslate.com