Digital Currency Group (DCG) has spun off its crypto mining operations into a new standalone subsidiary, Fortitude Mining, to offer institutional exposure to a pool of mined digital assets.
Fortitude Mining was previously part of Foundry, DCG’s decentralized mining and staking arm. The newly formed company will be led by Andrea Childs, who joined Foundry in 2020 and now serves as CEO of the mining subsidiary.
The restructuring may align with Foundry’s broader strategic shift. In December, Foundry laid off 16% of its U.S. workforce to focus more on Bitcoin mining. Despite these changes, Foundry remains the largest Bitcoin mining pool, controlling over 30% of the network’s hashrate, with China’s Antpool trailing at 17.8%, according to Hashrate Index data.
Earlier this month, DCG agreed to a $38 million settlement with the U.S. Securities and Exchange Commission (SEC) over allegations of misleading investors through its subsidiary, Genesis Global Capital.
The SEC’s investigation centered on how DCG handled the fallout from a major default involving one of Genesis’ largest borrowers, Three Arrows Capital.
In June 2022, Three Arrows Capital failed to meet a margin call, severely impacting Genesis’ operations. The SEC claimed DCG downplayed the default’s effects and overstated its support for Genesis. Alongside DCG, former Genesis CEO Soichiro “Michael” Moro agreed to settle related charges for $500,000.
This settlement was the latest chapter in DCG’s ongoing regulatory troubles. New York Attorney General Letitia James sued Gemini, Genesis, and later its parent company, Digital Currency Group (DCG), over a Gemini crypto lending program. He alleged that they defrauded over 29,000 New Yorkers and concealed $1.1 billion in losses.
Mining industry adapts post-halving
Bitcoin miners faced new economic pressures following the network’s fourth halving event in April 2024. A report from Galaxy Digital estimated $460 million in mergers and acquisitions in the first half of 2024, predicting further consolidation as mining economics tighten.
Architect Partners also reported an increase in acquisition activity, with major mining firms expanding data center capacity and seeking cheaper energy sources.
Publicly traded miners responded to the changing landscape by diversifying their strategies. Companies like MARA Holdings, Riot Platforms, and Hut 8 have focused on accumulating Bitcoin rather than selling it immediately.
