Cryptocurrency giant reveals BRL 5.7 billion loss

Cryptocurrency giant reveals BRL 5.7 billion loss

The Digital Currency Group (DCG), one of the largest companies in the cryptocurrency market, had a loss of US$1.1 billion (R$5.72) in the year 2022. The information was published this Monday (27) by CoinDesk, a news portal linked to DCG itself.

In January, the subsidiary announced it would be seeking buyers amid the crisis of Barry Silbert’s empire.

Other companies run by DCG include Grayscale, known for its GBTC fund, and Genesis, which went bankrupt earlier this year after defaulting on the Winklevoss twins, who promised to sue the group.

Billionaire damage exposes the DCG crisis

Basically, a spokesperson for the Digital Currency Group (DCG) revealed to CoinDesk that the $1.1 billion annual loss is related to the fall of Bitcoin and other cryptocurrencies. In addition, the bankruptcy of Three Arrows Capital (3AC), one of the first pieces to fall and caused a long-lasting domino effect of bankruptcies, would have been another reason.

Following this, a report points out that DCG had US$5.3 billion (R$27.6 billion) at the end of last year. Of this, US$262 million (1.36 billion) would be in cash or cash equivalents. Another US$ 670 million (R$ 3.5 billion) would be in investments, including in its own subsidiary, Grayscale. The rest of the amount would be handled by Grayscale and Foundry.

The loss of US$ 1.1 billion and especially the economic maneuver between DCG and its subsidiary show in any case that the situation of the giant is not so favorable. In addition, even the US Securities and Exchange Commission, the SEC, Genesis are investigating what could cause Silbert more problems.

Domino effect of cryptocurrency

As the DCG spokesperson himself explained, one of the biggest reasons for the giant’s billionaire loss in 2022 was the bankruptcy of Three Arrows Capital. So this illustrates the danger of contagion in the cryptocurrency market.

Another example of this domino effect was the bankruptcy of FTX. In a document released earlier this year, the brokerage took 116 pages to list all of its creditors, including tech companies, media and other brokerages, but did not disclose any amounts.

Therefore, the cryptocurrency market must learn from the mistakes of 2022 if it is to be more solid. Otherwise, few pieces will remain on this table and the industry will become increasingly fragile.

Source: Live Coins