Digital Currency Group (DCG) has released its Q3 financial figures and responded to the latest fraud lawsuit filed by the New York Attorney General (NYAG).
The firm earned $188 million in the third quarter, compared to $153 million in Q3 2022. Earnings before interest, taxes, depreciation, and amortization (EBITDA) were $69 million. Most of this came from its asset management firm, Grayscale, which holds over $26 billion in Bitcoin and Ethereum funds with a 2% management fee.
In August, DCG won a major court victory against the Securities and Exchange Commission (SEC). This bolstered their chances of converting their Bitcoin fund into a spot Bitcoin ETF, which caused GBTC shares to rally this year.
However, the firm’s crypto trading unit Genesis filed for bankruptcy last month due to large exposure to Three Arrows Capital, Alameda Research, and FTX. DCG is now being investigated by regulators for its relationship with Gemini Earn, a retail crypto-earning company. Gemini accused DCG and its CEO Barry Silbert of fraudulently misrepresenting its financial status to their company and attempting to conceal a $1.1 billion balance sheet hole.
The NYAG’s lawsuit alleges the same, but also targets Gemini for withholding information from its creditors.
In response, DCG stated it was “blindsided” by the lawsuit, claiming there is “no evidence of wrongdoing by DCG, Barry Silbert, or our employees.” They argued the NYAG has made “overly broad allegations about our entire industry in press releases.”
DCG has since disbursed $225 million of debt payments to Genesis’s creditors. CEO Silbert also revealed that his nine-year-old daughter is battling a cancer diagnosis.
