Digital Currency Group (DCG) is a venture capital company focusing on the digital currency market. It is located in Connecticut. DCG helps accelerate the development of financial system by building and supporting blockchain and digital currency companies using network, insights, and access to capital. ^[1]

History

Digital Currency Group was launched in 2015 by Barry Silbert, who previously founded SecondMarket, Inc. He began investing in Bitcoin companies in 2013.  First, as an angel investor- providing funding for many of the earliest companies including Coinbase, BitPay, and Ripple. ^[1]

In 2015, Silbert sold SecondMarket to NASDAQ.  Shortly after SecondMarket’s sale, Silbert formed Digital Currency Group, with Genesis and Grayscale becoming the first of the company’s subsidiaries. In November 2021, the firm relocated its Manhattan headquarters to Stamford, Connecticut.

Subsidiaries

Genesis

Genesis Global Trading was founded in 2013. It is a subsidiary of DCG. It is a cryptocurrency trading, lending, and asset custody platform, targeting institutional clients and high net worth individuals. They claim to have been the first Bitcoin cryptocurrency desk. ^[7]

Genesis acquired the London-based cryptocurrency custodial company Volt in early 2020. Genesis' sister company Grayscale Investments had been holding its cryptocurrency assets with the company Xapo, which had been acquired by Bitcoin trading company, Coinbase in 2019.

In late June and early July 2022, Genesis publicly disclosed that it was exposed to hundreds of millions of dollars in losses from loans to both the Hong Kong based cryptocurrency lender, Babel Finance and the bankrupt cryptocurrency hedge fund, Three Arrows Capital (3AC), and that its parent company DCG had taken on some of Genesis' debts in order to keep the company afloat. On August 17, 2022, Genesis CEO, Michael Moro resigned to serve in an advisory position, while COO Derar Islim became interim CEO. 

In February 2023, DCG struck a deal with creditors to either sell its Genesis unit or turn its equity over to creditors. On February 6, 2023, Genesis Global Holdco announced a possible agreement with its creditors and DCG, wherein DCG would give its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco. DCG would also re-finance its loans from Genesis and exchange its existing $1.1 billion promissory note for convertible preferred stock issued by DCG. However in April, some creditors walked away from the restructuring agreement.

In May 2022, it was reported that DCG had missed a $630 million payment to Genesis, while owing the unit $1.65 billion. The firm stated that:

Due to the state of the broader economy and prolonged crypto winter, along with the challenging regulatory environment for digital assets in the U.S, it shut down TradeBlock on May 31, 2023.

In July 2023, Gemini sued DCG in New York citing fraud, with the intent of reclaiming funds. In August 2023 DCG reportedly faced an unannounced probe by the New York Attorney General(NYAG), who was seeking information related to the financial dealings of DCG's subsidiary Genesis.

On January 19, 2023, a new Chapter 11 deal was agreed on with DCG and lender Genesis Global as well as a major creditor group in late August 2023. The agreement involved paying out up to 90% of the amount owed to Genesis customers using new loans.

In October 2023, the NYAG filed a lawsuit against DCG, Gemini Trust, and Genesis Capital for allegedly defrauding more than 230,000 investors of more than $1.1B. The companies allegedly lied to the investors over the expected returns of their investments and in regards to their safety, while also concealing losses from them and the public. DCG replied that they would fight the claims, and that they were shocked by the baseless allegations.^[10]

Grayscale

Established in 2013, Grayscale is a digital currency investing firm. Grayscale also manages the Grayscale Bitcoin Investment Trust (GBTC), which was the first publicly quoted securities solely invested in, and deriving value from, the price of Bitcoin when it launched in 2013. 

As of April 2021, six of Grayscale’s funds were traded publicly on the OTCQX market, and is only available to accredited investors. ^[2]

Grayscale Bitcoin Trust was approved for public trading by the U.S. Financial Industry Regulatory Authority (FINRA) in 2015. On January 21, 2020, Grayscale Bitcoin Trust became the first digital currency financial product to become a Securities and Exchange Commission reporting company.

In 2018, Grayscale launched the Grayscale Digital Large Cap Fund, which allows a customer to invest in a group of prominent digital currencies. The fund was approved to trade on public markets by the FINRA in October 2019. In May 2022, it was reported that Grayscale would list an exchange-traded fund (ETF) for the first time in Europe. 

CoinDesk

CoinDesk is a global media, research, and events platform that was acquired by Digital Currency Group in 2016. The company is best known for its coverage of blockchain’s daily news, Bitcoin Price Index and data tools, and its tutorials and research products, including the quarterly State of Bitcoin report. CoinDesk also hosts a conference on digital currencies and blockchain technologies titled Consensus,  which was last held in May 2018 in New York City and hosted approximately 8,500 attendees. ^[3]

On November 20, 2023, Bullish announced that it has acquired CoinDesk from DCG. Bullish Global plans to invest in CoinDesk’s global expansion and the growth of the media, events, and indexing businesses. CoinDesk will continue to be led by Kevin Worth and the existing management team and operate as an independent subsidiary within the Bullish Group.^[6]

Luno

Established in 2013, Luno, an independent operating subsidiary of Digital Currency Group, is a crypto exchange. The DCG Expeditions team works closely with Luno Global, to leverage Luno's global footprint and operating experience. They rebranded from Luno Expeditions to DCG Expeditions, to emphasize the link with DCG. ^[4][5]

In September 2020, DCG acquired Luno, with other operations in Cape Town and Singapore. At the time of the acquisition, Luno had more than 5 million customers.^[8]

Foundry

Foundry Services, established in 2019, sets up and manages Bitcoin mining operations in the United States and Canada. In addition to setting up and operating its own cryptocurrency mining equipment, Foundry also provides financing, specialized digital mining equipment, and expertise to other digital currency startups.

In the summer of 2021, Foundry helped to relocate over $300 million worth of equipment from China to North America following the Chinese government shutdown of many cryptocurrency mining operations.^[5]

Bloomberg reported in April 2023 that, Foundry would stop offering free Bitcoin mining services, and between April 19 and April 22, would instead levy a pool fee on members. The services had been free since 2019.^[9]

DCG Expeditions

It is a small global team within the Digital Currency Group with diverse backgrounds and expertise spanning crypto, fintech, early stage tech and emerging market investing, supporting the world-class founders. DCG Expeditions is DCG’s team focused on backing early-stage founders (pre-seed, seed) building the next generation of financial services.^[4]