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 BTC 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 Q4 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 Grayscale and Foundry, according to DCG.
A DCG spokeswoman said all the investment assets and the value of the venture portfolio has 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 non-binding 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.