Digital Currency Group reports a $1.1 billion loss for 2022

The Digital Currency Group (DCG) reported a net loss of $1.1 billion and $262 million in cash and cash equivalents in its 2022 results, as reported by CoinDesk.

Consolidated revenue came in at $719 million.

“In addition to the decline in crypto asset prices, the results reflect the impact of the Three Arrows Capital default on Genesis“, — according to an investor presentation.

DCG’s assets stood at $5.3 billion, of which $670 million were investments, reflected as Mark to Market. The latter category includes acquired tokens, shares of the subsidiary Grayscale Investments, investments in venture firms and funds.

The document provides an independent valuation of DCG at $2.2 billion. It broadly aligns with a 75-85% decline in sector equity values for the same period. In November 2021 the holding valued at $10 billion.

The report notes that DCG has achieved progress in restructuring Genesis, signing a preliminary agreement with some major creditors.

The agreements envisage the gradual write-off of Genesis’s portfolio and the sale of insolvent structures.

The terms also include refinancing from May 2023 to June 2024 of outstanding loans from the subsidiary to DCG, about $500 million in fiat and about $100 million in Bitcoin.

The agreement includes recognition of a 10-year note for $1.1 billion, issued by Genesis’s parent, as part of equity in the form of convertible preferred shares.

Finalising the deal documents and securing support for the restructuring plan is expected to take several months, according to the presentation.

The creditor group has been negotiating on behalf of corporate and individual creditors with total claims against Genesis of roughly $2.4 billion. The proposed deal will be presented to other interested parties, including hundreds of thousands of Gemini Earn customers.

On November 16, 2022, Genesis Global Capital froze withdrawals and the issuance of new loans. The firm cited heightened client requests after the FTX collapse.

In January, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to media reports, their liabilities exceed $3 billion.

Earlier it emerged that DCG was considering the sale of CoinDesk, which it owns, amid the financial distress of other group entities.

The company began selling shares in some of the largest crypto funds managed by Grayscale Investments at a significant discount, according to media reports.