Digital Currency Group (DCG) saw a surge in revenue in the first quarter of 2024, driven by the recovery of crypto markets. 

The crypto conglomerate’s revenue jumped 51% year-over-year to $229 million, the company reportedly wrote in a letter to shareholders.

Grayscale’s revenue held steady during the quarter despite $17.4 billion in outflows from its Bitcoin fund since it was converted to an exchange-traded fund (ETF) in January. The asset manager generated $156 million in revenue thanks to rising asset prices, offsetting losses in assets under management.

Grayscale’s outflows have arisen from the growing competition between Bitcoin ETF issuers offering lower management fees. The Grayscale Bitcoin Trust (GBTC) charges 1.5% in management fees, while other funds, such as the Bitwise Bitcoin ETF (BITB), charge 0.2%.

“While Grayscale expected outflows alongside increased competition under the ETF wrapper, Q1 revenue attributable to GBTC nevertheless exceeded our expectations,” Digital Currency Group said in the letter. Data from YCharts shows GBTC managed assets totaling over $18.1 billion as of May 9.

Other businesses under DCG’s umbrella also posted revenue growth during the quarter. Crypto mining pool Foundry’s revenue jumped 35% to $51 million, boosted by staking services and equipment sales. Investing platform Luno saw its revenue soar by 46% to $16 million thanks to higher trading volumes.

The conglomerate has been facing regulatory challenges in the United States. The New York Attorney General’s Office (NYAG) has recently expanded a fraud lawsuit against DCG, its CEO Barry Silbert, and Genesis Global Capital’s former CEO Soichiro Moro, to seek $3 billion in restitution.

The NYAG accuses the companies of defrauding over 230,000 investors out of $1 billion through the Gemini Earn program. According to the initial complaint, the lawsuit seeks to ban Gemini, Genesis, and DCG from operating in New York, along with restitution for investment losses.

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