Crypto industry powerhouse Digital Currency Group (DCG) has provided a response to its latest fraud lawsuit from the New York Attorney General (NYAG) last week, alongside updated Q3 financial figures.
The conglomerate raked in $188 million in the third quarter, compared to $153 million in Q3 2022. Meanwhile, the firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) were $69 million.
Most of that revenue came from the company’s asset management firm, Grayscale. The asset manager holds over $26 billion across its Bitcoin and Ethereum funds, for which it charges a 2% management fee for each.
In August, the company scored a major court victory over the Securities and Exchange Commission (SEC), bolstering its odds of converting its Bitcoin fund into a spot Bitcoin ETF. GBTC shares have rallied this year in response.
The update follows the full cessation of operations from DCG’s crypto trading unit Genesis last month, which went bankrupt due to massive exposure to other collapsed crypto firms including Three Arrows Capital, Alameda Research, and FTX.
In contrast to Grayscale, DCG is currently being hounded by regulators for how it managed its relationship with Gemini Earn – a retail crypto-earning company that allowed its customer’s assets to be managed by Genesis. Back in July, Gemini sued DCG and its CEO Barry Silbert for committing fraud by misrepresenting its financial status to their company, attempting to conceal a $1.1 billion balance sheet hole.
NYAG Letitia James’ more recent lawsuit alleges much the same, but also targets Gemini itself for withholding information from its creditors, alleging that the firm’s “internal analyses of Genesis showed that the company’s financials were risky.”
In its Q3
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