8. February 2023

• Cryptocurrency broker Genesis Global Trading allegedly owes its creditors more than $3 billion.
• Its parent company, the Digital Currency Group, is looking to sell part of its venture capital holdings to offset the shortfall.
• DCG chief Barry Silbert revealed that Three Arrows Capital owes Genesis $447.5 million and 4,550 Bitcoin (BTC).

Cryptocurrency broker Genesis Global Trading has allegedly racked up more than $3 billion in debt to its creditors, according to a Jan. 12 report from the Financial Times. In response, its parent company, the Digital Currency Group (DCG), is now looking to sell part of its venture capital holdings in order to offset the shortfall.

The venture arm of DCG is said to have more than 200 crypto-related projects, such as exchanges, banks, and custodians in at least 35 countries. The portfolio is reportedly valued at around $500 million. In order to recoup some of the losses, Genesis has reportedly hired investment bank Moelis to explore strategic alternatives. However, people familiar with the matter said that there is little interest in terms of capital infusion.

In order to cut costs, Genesis laid off 30% of its staff on Jan. 5, the second such measure in six months. DCG chief Barry Silbert wrote to shareholders on Jan. 12, citing “bad actors and the implosion of leading crypto companies” as the cause of the industry’s woes.

Silbert also disclosed that Three Arrows Capital still owes Genesis $447.5 million and 4,550 Bitcoin (BTC) worth $78 million, which matures in May 2023. Three Arrows Capital is currently in bankruptcy proceedings and creditors have expressed severe frustration towards the process. Cointelegraph reported on November 16, 2022, that Genesis halted withdrawals citing “unprecedented market turmoil”. At the time, the company reportedly had $175 million worth of Bitcoin in its possession.

Given the massive debt and lack of capital infusion interest, Genesis faces an uphill battle. It remains to be seen how the company will move forward in the coming months, though it’s clear that cutting costs and selling assets are its only viable options in the short-term.