So, let's talk about Digital Currency Group (DCG) and their subsidiaries like Genesis, Grayscale, CoinDesk, and Foundry.
There's this interesting letter from Jeremy to Barry Silbert about the Earn Update.
If Grayscale ends up going under, what do you think will happen? Could be more chaotic than what we saw with the Sam Bankman-Fried saga. Market prices would probably plummet, and institutional investors would be pretty rekt in that scenario.
In my opinion they will not go bankrupt easily Digital Currency Group is far more biggest than FTX but I would be crazy and I'm done with this kind of Shit
after do some search on the internet
(Shortly after on Nov. 22, Genesis confirmed that the firm hired investment bank Moelis & Co for restructuring services as a means to avoid the Chapter 11 route.
In the letter, Genesis reaffirmed that it is committed to being as transparent as possible to those affected and that customers will be informed of meaningful developments, including any updates on timing. ) - https://cointelegraph.com/news/crypto-lender-genesis-has-no-solution-yet-for-withdrawal-halts
Have you seen the Grayscale bitcoin wallet? They have approximately 654,600 BTC.
Goldman Sachs is also owned by the Rothschilds. I heard that Goldman Sachs will store these bitcoins
The Gemini exchange made savings for clients at 8% per annum, and loaned clients' money to Genesis at a rumored 12% per annum.
Grayscale is one of the greatest scams of 2022. His clients do not own the cryptocurrency, the clients own the shares of this company, which has 30 billion.
This is my opinion, but tell me where is the Grayscale cryptocurrency? May the assets be pledged. And when Grayscale fails to pay its obligations in the 2nd quarter of 2023, then this company will be in big trouble.
I can be wrong, but if I am right, then the market situation will be even worse. Goldman Sachs and other whales will buy all the assets of the cheap, and then there will be a new stage of growth.
Cheerfully, the SEC decided to slap both market participants in the face
https://www.sec.gov/news/press-release/2023-7
SEC Charges Genesis and Gemini for the Unregistered Offer and Sale of Crypto Asset Securities through the Gemini Earn Lending Program
https://www.reuters.com/business/finance/dcgs-crypto-broker-genesis-owes-creditors-more-than-3-bln-ft-2023-01-12/
Jan 12 (Reuters) - Crypto broker Genesis owes creditors more than $3 billion, a person familiar with the matter told Reuters, as woes pile up for its owner, venture capital company Digital Currency Group (DCG).
So? Even if they go bankrupt it doesn't mean they will dump all of it on centralized exchanges to crash the market. Only scammers like Do Kwon are this dumb. I don't expect a real company that's this big to make a move like that. They'll rather try to make money other ways and they are doing it. There were rumors about Coindesk being put up for sale in November 2022. With so much bitcoin in custody they can easily get a loan. Also, DCG isn't completely insolvent and they have many options on the table. IMO they have enough money to keep going until the next bull market bails them out.
Moreover there's news that a few billion in crypto has been recovered from FTX wallets, which is something like 70% of what they owe. If that's true DCG should be safe.
I'm not sure if this company has bitcoins, and if bitcoins exist, then they are controlled by another company. When you see the consequences of the collapse of these funds, you will understand that the Do Kwon scam will seem childish to you.
Genesis is laying the groundwork for a bankruptcy filing as soon as this week. The company is working toward a restructuring plan and had swapped proposals with its creditors, some of whom had suggested receiving a mix of cash and equity from DCG.
https://twitter.com/WuBlockchain/status/1615879804393508864?
bloomberg
Might not be the worst outcome. Given enough time and effort they might be able to make enough money to cover the losses and pay everyone back.
Also, might be able to work on better negotiations with the people they owe. i.e. we give you 75% now and you walk or we can try to pay you back but we can't guaranty how much of it or any particular time frame.
Enough people might take the buyout that it gives them even more time and money to get things done.
I have see things like this work in other financial things and see it implode impressively. Lets see how this one turns out.
-Dave
Grayscale is an ETF. So what else did you expect? An ETF of a bunch of stocks does not mean you are an investor in the companies represented by those stocks - the people managing the ETF are. Same goes for cryptocurrency.
So far, it has pacified a lot of investors who otherwise would've ran away from Bitcoin as if it was some plague.
Investments in cryptocurrency when stored in your own cold wallet will give a profit in the long run. I don't understand how senior investment fund managers give money to scammers with no guarantees of return on investment and no legislation to protect investors.
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https://www.coindesk.com/business/2023/01/17/crypto-conglomerate-dcg-suspends-dividends-amid-distress-at-genesis-unit/
Crypto Conglomerate DCG Suspends Dividends Amid Distress at Genesis Unit
"In response to the current market environment, DCG has been focused on strengthening our balance sheet by reducing operating expenses and preserving liquidity," it told shareholders in a letter Tuesday.
Ok, now that rings alarm bells in my head. There's no good reason for any company to stop paying dividends, unless they are running out of cash (or they're just asshats in the case of Amazon) which seems like what the entire DCG is going through right now.
I'm just waiting for the ironic article to be written on CoinDesk: "DCG declares bankruptcy".
Yes and no. They might be worried about another major downturn and want to have cash on hand to ride it out.
NOT saying that this is what is happening here, but more and more you see businesses hoarding more and more cash *just in case*.
There were a lot of viable business out there that could not survive the 2008 market crash and others that went out during Covid. There were profitable and doing well, but needed that cash to keep flowing. Without that they just did not have the liquidity to keep it going. So now they hoard. There are a bunch of downsides to doing that too.
Once again, not saying that is what is happening here, just that it does happen.
-Dave
GEMINI is in trouble now because they have used up 900 million of their clients' funds. It is very difficult for me to understand American financial legislation, but I am interested in what the consequences of this bankruptcy will be for a large American stock exchange.
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https://twitter.com/lookonchain/status/1616428210929168385
"Before Genesis Global filed for bankruptcy protection, the Genesis Trading OTC address transferred:
- 50,000 $ETH($77.6M) #Coinbase;
- 20,000 $ETH($31M) to #Bitstamp;
- 5,000 $ETH($7.76M) and 3.9M $USDT to #Kraken;
- 7.7M $FTM ($2.35M) to #Binance;
- 36M $USDC to new address."
Discuss in-depth: Genesis files for bankruptcy reorganization, Will DCG crash? What is the impact on industry?
https://wublock.substack.com/p/discuss-in-depth-genesis-files-for
https://www.coindesk.com/business/2023/01/20/genesis-claims-51b-in-liabilities-in-first-day-bankruptcy-filing/
Genesis Claims $5.1B in Liabilities in First-Day Bankruptcy Filing
Three of the institutional crypto brokerage's entities filed for Chapter 11 protection late Thursday.
Crypto lending firm Genesis held $5.1 billion in liabilities in the weeks following its freeze on withdrawals last November, according to bankruptcy court documents signed by interim CEO Derar Islim.
London-based crypto exchange Luno informed employees of the redundancies at 12 p.m. GMT on Wednesday in a live-streamed town hall.
Luno has a total headcount of roughly 960, according to its LinkedIn profile, meaning that more than 330 jobs will be impacted.
The company, which has offices in Africa, southeast Asia and Europe, is part of the Digital Currency Group crypto conglomerate.
TECH DCG-owned crypto exchange Luno axes 35% of staff, citing market turbulence
https://www.ft.com/content/abee7e2e-1d18-4a68-aac5-665869db250f
DCG sells shares in Grayscale crypto trusts in push to raise funds
"Digital assets conglomerate sells down holdings in prized investments at a discount to pay creditors
Crypto conglomerate Digital Currency Group has begun to sell shares in several of its most prized cryptocurrency funds at a steep discount, as it seeks to raise capital to pay back creditors of its bankrupt lending arm.
SoftBank-backed DCG has started to offload its holdings in several investment vehicles run by its subsidiary Grayscale, according to US securities filings seen by the Financial Times."
https://www.coindesk.com/markets/2023/03/06/gbtc-discount-narrows-to-42-ahead-of-grayscales-etf-hearing-tuesday/
GBTC Discount Narrows to 42% Ahead of Grayscales ETF Hearing Tuesday
"The closed-end fund's discount to net asset value had widened to 47% in mid-February.
The Grayscale Bitcoin Trust (GBTC) discount to net asset value has fallen to its lowest level in a month ahead of oral arguments in federal court on Tuesday related to Grayscale's lawsuit against the U.S. Securities and Exchange Commission."
FTX Debtors File Lawsuit Against Grayscale Investments, LLC and its CEO and Owners
FTX Debtors Demand Injunctive Relief to Allow Redemptions and Reduce Fees in Grayscale Trusts
Grayscale and its Controllers Continue to Breach Trust Agreements and Fiduciary Duties
Grayscale's Self-Imposed Redemption Ban Prevents Realization of Approximately $9 Billion of Value
https://www.prnewswire.com/news-releases/ftx-debtors-file-lawsuit-against-grayscale-investments-llc-and-its-ceo-and-owners-301763694.html
https://dailyhodl.com/2023/04/11/fidelity-and-bank-of-america-gain-exposure-to-bitcoin-as-financial-giants-heavily-invest-in-microstrategy/
"Financial titans Fidelity and Bank of America are now indirect owners of Bitcoin (BTC) after the two firms heavily accumulated shares of MicroStrategy (MSTR) in Q1 this year.
MicroStrategy is the largest institutional holder of Bitcoin, owning 140,000 BTC worth more than $4.22 billion.
Data from CNN shows that Bank of America is now the fourth-largest shareholder of MicroStrategy after the bank bought tens of millions of dollars worth of MSTR in Q1 of 2023"