Digital Currency Group (DCG) is a

venture capital Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...

company focusing on the

digital currency Digital currency (digital money, electronic money or electronic currency) is any currency, money, or money-like asset that is primarily managed, stored or exchanged on digital computer systems, especially over the internet. Types of digital cu ...

market. It is located in

Stamford, Connecticut Stamford () is a city in the U.S. state of Connecticut, outside of Manhattan. It is Connecticut's second-most populous city, behind Bridgeport. With a population of 135,470, Stamford passed Hartford and New Haven in population as of the 2020 ...

. The company has five subsidiaries which are '' CoinDesk'', Foundry,

Genesis Genesis may refer to: Bible * Book of Genesis, the first book of the biblical scriptures of both Judaism and Christianity, describing the creation of the Earth and of mankind * Genesis creation narrative, the first several chapters of the Book of ...

, Grayscale Investments, and Luno.

History

Digital Currency Group was launched in 2015 by Barry Silbert, a graduate of

Emory University Emory University is a private research university in Atlanta, Georgia. Founded in 1836 as "Emory College" by the Methodist Episcopal Church and named in honor of Methodist bishop John Emory, Emory is the second-oldest private institution of ...

who previously was CEO of SecondMarket, Inc. He began investing in blockchain technology companies in 2013. Shortly after SecondMarket’s sale, Silbert formed Digital Currency Group, with Genesis and Grayscale becoming the first of the company’s subsidiaries. In November 2021, the firm announced it would relocate its

Manhattan Manhattan (), known regionally as the City, is the most densely populated and geographically smallest of the five boroughs of New York City. The borough is also coextensive with New York County, one of the original counties of the U.S. state ...

headquarters to

. The

governor of Connecticut The governor of Connecticut is the head of government of Connecticut, and the commander-in-chief of the state's military forces. The governor has a duty to enforce state laws, and the power to either approve or veto bills passed by the Connecticu ...

at the time, Ned Lamont, provided financial incentives for the company to relocate to Stamford, including a $5 million grant from the state government if Digital Currency Group created at least 300 full-time jobs in the state. As of November 2021, Digital Currency Group had made over 200 investments in other

cryptocurrency A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It i ...

companies.

Subsidiaries

Genesis Global Capital

Genesis is a crypto trading, lending, and asset custody platform, targeting institutional clients and high net worth individuals. They claim to have been the first OTC Bitcoin crypto desk, launched in 2013. Genesis acquired the London-based crypto asset custodian company Volt in early 2020. Genesis' sister company Grayscale Investments had been custodying its crypto assets with the company Xapo, which had been acquired by Genesis' rival Bitcoin trading company

Coinbase Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work and the company lacks a physical headquar ...

in 2019. News media speculated that Genesis' crypto custody would be transferred away from Coinbase and made internal to Greyscale after completion of the Volt acquisition. In late June and early July 2022, Genesis publicly revealed that it had been left exposed to hundreds of millions of dollars in losses from loans to both the Hong Kong based crypto lender Babel Finance and the bankrupt crypto hedge fund

Three Arrows Capital Three Arrows Capital (also known as 3AC or TAC) was a Singapore-based cryptocurrency hedge fund which was ordered to liquidate on 27 June 2022 by a court in the British Virgin Islands. It was founded in 2012 by Kyle Davies and Su Zhu. The compan ...

(3AC), and that its parent company DCG had taken on some of Genesis' debts in order to keep the company afloat. On August 17, 2022, CEO Michael Moro resigned from his position. Genesis Trading announced that he would be serving in an advisory position to help with the transition while COO Derar Islim took over his duties as interim CEO. On January 19, 2023, Genesis Global Capital, Genesis Global Holdco and Genesis Asia Pacific filed for Chapter 11 bankruptcy protection, citing over 100,000 creditors and liabilities of between $1 billion and $10 billion. On February 6, 2023, Genesis Global Holdco announced an agreement in principle with DCG and creditors of Genesis Global Capital. The agreement, which is subject to bankruptcy court approval, will see DCG give its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco. DCG will also refinance its loans from Genesis and exchange its existing $1.1 billion promissory note for convertible preferred stock issued by DCG.

Grayscale Investments

Established in 2013, Grayscale Investments is a digital currency asset manager. It offers funds privately for institutional and accredited investors and publicly-traded products. They were the world’s largest asset manager for digital currency, as of December 2021, with more than $50 billion in assets under management at the time. Grayscale also manages the Grayscale Bitcoin Investment Trust (), which was the first publicly quoted securities solely invested in the price of bitcoin upon its launch in 2013. As of April 2021, six of Grayscale’s funds were traded publicly on the

OTCQX OTC Markets Group (previously known as Pink Sheets) is an American financial market providing price and liquidity information for almost 10,000 Over-the-counter (finance), over-the-counter (OTC) securities. The group has its headquarters in Ne ...

market: the Bitcoin Cash, the Grayscale Bitcoin Trust, the Grayscale Ethereum Trust, the Grayscale Ethereum Classic Trust, the Grayscale Digital Large Cap Fund, and the Grayscale Litecoin Trust. Grayscale Bitcoin Trust was approved for public trading by the Financial Industry Regulatory Authority in 2015. On January 21, 2020, Grayscale Bitcoin Trust became the first digital currency financial product to become a

Securities and Exchange Commission The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...

reporting company. In 2018, Grayscale launched the Grayscale Digital Large Cap Fund which allows a customer to invest in a group of prominent digital currencies. The fund was approved to trade on public markets by the Financial Industry Regulatory Authority in October 2019. In May 2022, it was reported that Grayscale would list an

exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the ...

(ETF) for the first time in Europe. The ETF was said to be made up of companies representing the "Future of Finance", and would begin trading on May 17.

''CoinDesk''

''CoinDesk'' is a global media, research, and events platform that was acquired by Digital Currency Group in 2016. It reports on blockchain’s daily news, provides a Bitcoin Price Index and publishes a quarterly ''State of Bitcoin'' report. CoinDesk also hosts a conference on digital currencies and blockchain technologies titled ''Consensus''.

Foundry

Foundry, established in 2019, sets up and manages bitcoin mining operations in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

and

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

. In addition to setting up and operating its own cryptocurrency mining equipment, Foundry also provides financing, specialized digital mining equipment, and expertise to other digital currency startups. In the summer of 2021, Foundry helped to relocate over $300 million worth of equipment from

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...

to North America following the Chinese government shutting down many cryptocurrency mining operations.

Luno

In September 2020 Digital Currency Group acquired Luno, a cryptocurrency exchange based in

London London is the capital and largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary down to the North Sea, and has been a majo ...

, with other operations in

Cape Town Cape Town ( af, Kaapstad; , xh, iKapa) is one of South Africa's three capital cities, serving as the seat of the Parliament of South Africa. It is the legislative capital of the country, the oldest city in the country, and the second largest ...

and

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...

. At the time of the acquisition, Luno had more than 5 million customers.

Repercussions of FTX bankruptcy

On November 10, 2022, DCG subsidiary Genesis Trading posted to their official Twitter feed that they had lost approximately $175 million dollars in the

bankruptcy of FTX The bankruptcy of FTX is the ongoing liquidation of Bahamas-based cryptocurrency exchange FTX, beginning in November 2022. The collapse of FTX, caused by a liquidity crisis of the company's token, FTT, served as the impetus for its bankruptcy. P ...

caused by the bankruptcy of Bahamas-based cryptocurrency exchange

FTX FTX Trading Ltd., commonly known as FTX (short for "Futures Exchange") is a bankrupt company that formerly operated a cryptocurrency exchange and crypto hedge fund. The exchange was founded in 2019 and, at its peak in July 2021, had over one mi ...

. The company claimed that "This does not impact our market-making activities." On November 16, 2022, DCG subsidiary Genesis Global Capital suddenly halted all Bitcoin withdrawals and loan applications for their customers. On November 17, 2022, the ''

Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...

'' reported that it had obtained confidential documents stating that Genesis was undergoing an "ongoing run on deposits" and a $1 billion emergency loan by the following Monday, November 21.

References

External links

* {{Cryptocurrencies Digital currency exchanges Bitcoin exchanges Bitcoin companies American companies established in 2015 Financial services companies established in 2015 Companies based in Connecticut Companies based in Stamford, Connecticut