Crypto conglomerate Digital Currency Group told shareholders in its second quarter financial update that it is close to resolving the claims in the bankruptcy case of its lending unit Genesis Capital.
The update comes a month after the Winklevoss Twins' Gemini, which is among Genesis' creditors, sued the firm alleging fraud. In DCG's letter to investors, it said that "after months of tireless negotiations led by DCG leadership, we are close to reaching an agreement in principle to resolve the claims in the Genesis Capital Chapter 11 cases."
"We expect to bring these cases to a close soon," the firm added.
Genesis' lending business filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York at the beginning of the year after it was hit by the crisis that swept crypto's lending market in 2022.
DCG also provided updates across its family of companies, noting that it hired a new chief financial officer, Mark Shifke. He previously served as CFO at publicly traded firms Billtrust and Green Dot. Before that, he was managing director of M&A and Corporate Finance Structure at JPMorgan Chase.
Michael Kraines stepped down on May 2 after serving as DCG's CFO for two years. In the interim, the firm's president Mark Murphy and chief strategy officer Simon Koster co-led the finance department while a replacement was sought, The Block previously reported.
Shifke joins at a pivitol time for DCG, which reported a consolidated EBITDA loss of $79 million for the second quarter and is currently eyeing the sale of a number of businesses. Excluding Genesis, the firm said that its EBITDA run rate came in at around $244 million. It said media company CoinDesk brought in $15 million from its Consensus conference this past April.
Ongoing financial transactions
DCG is in the process of a number of ongoing financial transactions, including the partial sale of CoinDesk. It is also looking for strategic investors for its crypto exchange Luno.
"With positive momentum and feedback from the market, we have held discussions with numerous interested parties over the last few months and these processes are progressing," the firm said.
Earlier this month, the Wall Street Journal reported that DCG was close to selling a stake of CoinDesk to a group of investors that included longtime crypto investor Matthew Roszak.
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