On January 13th, the Tron DAO founder Justin Sun revealed he would be willing to spend up to $1 billion on the assets of Barry Silbert’s Digital Currency Group. Reportedly, DCG is looking to sell some of its holdings to help repay the debt of Genesis, one of its subsidiaries.
Justin Sun Willing to Spend $1 Billion on DCG
This Friday, Justin Sun, the founder of the Tron DAO and an advisor to Huobi, revealed he would be willing to spend up to $1 billion on the assets of the Digital Currency Group. Earlier this week, it was reported that DCG is considering selling some of its holdings to help cover Genesis’ debt.
Genesis is a subsidiary of DCG and owes around $3 billion to its clients. The company’s lending arm halted withdrawals on November 16th citing “extreme market dislocation”, shortly after the cryptocurrency exchange FTX filed for bankruptcy. DCG already injected $140 million into Genesis to help cover its immediate shortfall.
At the time of writing, it is unclear whether Justin Sun will ultimately acquire any of DCG’s assets. Previously, Sun offered billions of dollars in rescue funds to the now-collapsed FTX but never acted on the offer. More recently, Tron DAO announced it would back Binance’s Industry Recovery Fund.
Why DCG May be Selling its Assets?
While Barry Silbert, the CEO of the Digital Currency Group, attempted to somewhat distance his organization from the troubles facing Genesis, one of its subsidiaries, it was recently reported that DCG is considering the sale of some of its assets to cover the $3 billion debt. Already in mid-November, Genesis proved one of the first victims of FTX contagion when it froze withdrawals from its lending platform.
Since then, it was revealed that the firm hired restructuring advisors while considering bankruptcy as a potential way forward. Furthermore, the firm reportedly attempted to secure $1 billion in rescue funds without success—though a spokesperson called that information outdated and stated the company was having “very positive conversations” in late November.
Early in 2023, Cameron Winklevoss, the co-founder of Gemini, published an open letter calling on Genesis to repay its $900 million debt to Gemini Earn and later escalated the public feud by calling for the removal of Barry Silbert from his role as the CEO of DCG. Gemini Earn, a close partner of Genesis, halted withdrawals on the same day as DCG’s subsidiary and became officially defunct on January 8th.
On January 12th, the situation became even more complicated both for Gemini and for Genesis when the SEC got involved. The Commission announced it was suing both firms over the unregistered sale of crypto assets through Gemini’s Earn program though Tyler Winklevoss later stated their operations were registered with and regulated by the NYDFS.
This article originally appeared on The Tokenist.
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