Digital Currency Group records 59% rise in revenues despite legal troubles
Digital Currency Group (DCG), the parent company of Grayscale Investments, reported a 59% surge in revenue in the fourth quarter of 2023.
According to Bloomberg’s reports, the company sent a letter to its stakeholders today, highlighting that its revenue escalated to $210 million during the quarter, up from $132 million in the same period the previous year. The firm’s EBITDA reached $99 million, reflecting a profit increase.
The financial performance of DCG is closely tied to the broader cryptocurrency market trends, which have seen substantial growth, more than doubling since the beginning of last year.
Bitcoin has particularly benefited from introducing the first U.S.-based ETFs, marking a significant milestone after prolonged industry efforts to navigate the regulatory skepticism. DCG’s subsidiary, Grayscale Investments, operates the largest Bitcoin ETF in the market.
Bitcoin ETFs collectively drew in more than $9 billion in investor funds in the first month of trading. Since transitioning into an ETF, Grayscale’s Bitcoin Trust saw a $6 billion outflow. However, the rate of these withdrawals has slowed down over the past few weeks.
DCG’s positive financial performance might be a relief for investors and shareholders, as the firm has been facing major challenges on the legal front, with ongoing lawsuits against bankrupt crypto lending division Genesis.
Although Genesis Global settled with New York last week, the state revised its lawsuit against DCG and escalated the demands to $3 billion.
The lawsuit was filed last year, alleging DCG and its subsidiary Genesis misled over 230,000 customers and investors regarding its potential exposure to FTX and Alameda Research. New York’s Attorney General Letitia James initially demanded $1.1 billion compensation for the customers, later revising it to $3 billion, as new reports suggest the scale of the alleged fraud was much larger.
