DCG losses top $1B on the back of 3AC collapse in 2022

Cryptocurrency task superior conglomerate Digital Currency Group (DCG) has reported losses of implicit $1 cardinal successful 2022 owed mostly to the contagion relating tocollapse of crypto hedge fund, Three Arrows Capital (3AC).

DCG reportedly mislaid $1.1 cardinal past year, according to its Q4 2022 capitalist report,  and said the results “reflect the interaction of the Three Arrow Capital default upon Genesis” on with the “negative impact” from falling crypto prices.

Genesis is the lending limb of DCG, the steadfast filed for Chapter 11 bankruptcy successful precocious January. Genesis is 3AC’s largest creditor arsenic the institution loaned the now-bankrupt hedge money $2.36 billion, 3AC filed for bankruptcy successful July 2022.

DCG’s fourth-quarter losses came to $24 cardinal portion revenues came successful at$143 million.

Full-year 2022 revenues for DCG came successful astatine $719 million. The steadfast held full assets of $5.3 cardinal with currency and liquid holdings of $262 cardinal and investments — specified arsenic shares successful its Grayscale trusts — amounted to $670 million.

The remaining assets were held by divisions of its plus absorption subsidiary Grayscale and DCG’s Bitcoin (BTC) mining concern Foundry Digital.

Its equity valuation came successful astatine $2.2 cardinal with a terms per stock of $27.93 which the study said was “generally accordant with the sector’s 75%-85% diminution successful equity values implicit the aforesaid period.”

It’s a important diminution from conscionable implicit a twelvemonth ago, erstwhile DCG declared connected Nov. 1, 2021, that its valuation was much than $10 cardinal pursuing the sale of $700 million worthy of shares to companies similar Alphabet Inc., Google’s genitor company.

Related: Genesis Capital’s autumn mightiness alteration crypto lending — not hide it

However, the institution said it “hit a milestone” with the restructuring of Genesis.

The statement proposed earlier successful February would spot DCG lend its equity stock successful Genesis’ trading entity and bring each Genesis entities nether the aforesaid holding institution and spot its trading entity sold off.

DCG would besides speech an existing $1.1 cardinal promissory note owed successful 2032 for convertible preferred stock. Its existing 2023 word loans with an aggregate worth of $526 cardinal would besides beryllium refinanced and made payable to creditors.

A Genesis creditor said the program “has a betterment complaint of astir $0.80 per dollar deposited, with a way to $1.00” for those owed wealth by the firm.