Cryptocurrency conglomerate Digital Currency Group (DCG) reported a loss of $1.1 billion last year as the firm struggled with plunging crypto prices and the restructuring of its lending platform, Genesis.
"In addition to the negative impact of [bitcoin] and crypto asset price declines, last year's results reflect the impact of the Three Arrows Capital (TAC) default upon Genesis," DCG said in its fourth-quarter investor report.
DCG is the parent company of CoinDesk.
From a consolidated balance sheet perspective, DCG held total assets of $5.3 billion as of Dec. 31, 2022, the report said. This included cash and cash equivalents of just $262 million. Investment assets, including tokens, Grayscale trust shares, venture and fund investments amounted to $670 million. The remaining assets consist mostly of assets held by divisions Grayscale and Foundry, according to DCG.
A DCG spokeswoman said all the investment assets and the value of the venture portfolio have been marked to market.
DCG's Q4 revenues were $143 million, with losses of $24 million. Consolidated revenues for the full year were $719 million.
In its annual independent stock valuation, DCG had an equity valuation of $2.2 billion, or a price per share of $27.93. "This appraisal is generally consistent with the sector's 75%-85% decline in equity values over the same period," the report said.
Despite the challenges of last year, DCG said it had "hit a milestone" regarding the restructuring of Genesis, pointing to a nonbinding term sheet agreement involving some of the main creditors.
The agreement involves extending the maturity of DCG's May 2023 obligations to Genesis Capital of approximately $600 million (at current market prices) to June 2024. Also included is the restructuring DCG's infamous $1.1 billion promissory note, due in 2032, in exchange for the issuance to Genesis Capital creditors of a new class of DCG redeemable, convertible preferred stock.
Negotiating definitive transaction documents and soliciting votes on a reorganization plan is expected to take several months, said the report.
Sign up for The Node, our daily newsletter bringing you the biggest crypto news and ideas.
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.
Follow @IanAllison123 on TwitterLearn more about Consensus 2023, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.
Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.
Follow @IanAllison123 on Twitter