Barry Silbert, Founder and CEO of Digital Currency Group; Heidi Guttmann—Getty Images
Crypto empire Digital Currency, which started 2023 at the depths of the bear market, said in a letter to shareholders on Monday that it had a strong fourth quarter, a $4.4 billion valuation and a nearly $1 billion investment portfolio. reported.
For fiscal 2023, DCG reported EBITDA of approximately $275 million, up from $261 million in 2022, as consolidated sales decreased from $813 million to $749 million. The company incurred a loss of $7 million in the fourth quarter of 2022, resulting in a quarter-on-quarter EBITDA increase of more than 40% to nearly $100 million.
Founded in 2013 and led by Barry Silbert, the firm has long been a cornerstone of the cryptocurrency industry, with portfolio companies including asset management firm Grayscale, financial firm Genesis, and, until last year, industry publication CoinDesk. .
Thanks to outstanding loans through Genesis, Digital Currency Group began to reel in 2022 with the collapse of hedge fund Three Arrows Capital. The collapse of another major trading partner, FTX, forced Genesis into bankruptcy in early 2023, and DCG became embroiled in a series of lawsuits. We work with former partners and regulators such as the Securities and Exchange Commission and the New York Attorney General's Office.
After a disastrous 2023 that included a public spat between the Silverbart and Winklevoss twins and a swirl of litigation, Monday's shareholder letter aims to dispel doubts about the empire in crisis.
mixed bag
Despite myriad legal challenges, Digital Currency Group ended the year benefiting from rising Bitcoin prices. The move was prompted in part by Grayscale, one of DCG's portfolio companies, winning a battle with the SEC to convert its long-standing Bitcoin trust into an exchange-traded fund in August. As of Monday, Grayscale's ETFs had a market cap of about $23 billion, and the company charges a fee of 1.5%.
Digital Currency Group was further boosted by $38 million in revenue from mining company Foundry in Q4 2023, although this figure was still down 22% sequentially due to lower mining prices.
In the letter, November coin deskdigital asset exchange Bullish, a leading crypto publication, did not specify the size of the transaction. coin desk FTX's collapse was precipitated by the release of the balance sheet of affiliated trading company Alameda Research, but the ensuing bear market led Digital Currency Group to cut funding to the outlet and announce further restructuring. The company previously laid off nearly 50% of its employees in 2023. last week.
Genesis is also facing another hurdle as Digital Currency Group challenges bankruptcy plans for portfolio companies. In a court filing Friday, DCG's lawyers objected to the federal bankruptcy estate's proposed payment plan, writing that the Genesis Bankruptcy Foundation's proposal constituted a “gross abuse of process and breach of fiduciary duty.” , requested an emergency meeting in the Chapter 11 proceeding.
Although Genesis has settled two lawsuits from the SEC and the New York State Attorney General, the digital currency group remains embroiled in litigation, with Attorney General Letitia James last week filing fraud charges against Silbert and his empire. The amount was increased to $3 billion.
“This is the same baseless complaint that has been recirculated to make headlines again,” the letter to shareholders said, adding that Genesis' settlement with the attorney general's office violates bankruptcy law. It added that it was a further attempt to evade.
“We will continue to fight this attempt to violate the law,” the investor relations team wrote.
