Digital Currency Group rode the cryptocurrency rally over the first quarter to post revenue that topped the previous quarter, but still lagged the year-ago period.
The group's first quarter revenue totaled $180 million, up 63% from the fourth quarter. That's still down 46% from the first quarter of 2022, when bitcoin traded about $40,000.
“DCG’s financial performance this year so far is reflective of the market,” the letter said.
The firm also shared that DCG Chief Financial Officer Michael Kraines stepped down from his role in April. DCG President Mark Murphy and Chief Strategy Officer Simon Koster are co-leading the finance department while executive search company Heidrick & Struggles look for a new financial officer. Kraines had been CFO since March 2021.
DCG did not immediately respond to a request for comment.
DCG creditors 'reneged'
The shareholder update comes after Genesis, a DCG subsidiary, filed for bankruptcy protection in January. Although Genesis and DCG had reached a deal with creditors, DCG said last week that a said last week group of creditors had "reneged" on the agreement.
“DCG worked around the clock last winter to reach the original deal with Genesis and its creditors and will remain focused on implementing a fair and reasonable agreement for all parties. We will continue to update you as the process unfolds,” DCG said in the letter.
Also during the first quarter of 2023, DCG repaid a $350 million senior secured term loan that was issued by a lender syndicate led by Eldridge, a private equity investment firm.
“Aside from the amounts owed to Genesis, DCG no longer has any third-party debt. This is a major milestone and we’re looking forward to shifting our focus towards the next stage of DCG’s growth,” the letter said.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.