Digital Currency Group (DCG) has announced that certain creditors of its bankrupt subsidiary, Genesis Capital, have chosen to abandon the previous agreement for restructuring the cryptocurrency lender. DCG, a conglomerate in the digital asset industry, aimed to sell Genesis to re...
In February, DCG entered into a deal that offered the possibility of either selling Genesis or transferring its equity to creditors.
Furthermore, the industry is currently dealing with the aftermath of three crypto-friendly banks collapsing in the U.S. last month, which has caused a significant stir among crypto firms.
As a matter of fact, the collapse of FTX and other crypto-friendly banks drew attention to the challenges facing digital asset firms.
When crypto markets declined, investors withdrew their funds from exchanges, and in turn, from Silvergate.
The bank’s decision to invest in long-dated securities like Treasury notes, mortgage-backed securities, US agency securities, and municipal bonds to earn more yield contributed to its challenges.
While the failure of FTX and other crypto banks did not lead to a widespread contagion to the traditional banking sector, the risk of contagion from the crypto industry cannot be overlooked.
The company attributed its decision to the uncertain and unfavorable regulatory environment in the United States.