The host of the Coin Bureau says that this cryptocurrency company poses serious risks to the market. 3AC founder Zhu Su blames DCG for the company’s problems. Also, Gemini co-founder Cameron Winklevoss is lashing out at DCG boss Barry Silbert.
Expert: DCG, another downside risk for the cryptocurrency space
The Digital Currency Group (DCG) was one of the main reasons the crypto market emerged and reached $2 trillion in 2021. However, Coin Bureau host Guy Turner may also be the reason for the rapid decline into uncertainty, according to his statements. In this context, the crypto expert makes the following statement:
A DCG bankruptcy is a very real possibility. Also, another downside risk for the crypto space. I covered this in a separate video about a month ago. I will need to update at some point.
DCG has affiliation and control with hundreds of crypto exchanges, businesses, and websites. So, financial risk correlates financially with many other assets in the crypto space. Following this, the expert suggests that with $15 billion in cryptocurrencies in Grayscale’s treasury, Genesis will force the rest of the DCG group into bankruptcy. Also, Genesis, a DCG subsidy, is asking $1 billion from investors to cover recent losses from collapsing funds and stock markets. But time is running out, experts say, and DCG can’t seem to fill that gap.
3AC founder blames DCG
Likewise, 3AC founder Zhu Su openly blamed Digital Currency Group (DCG) for their misfortune. Zhu Su claims in his latest Twitter thread that FTX and DCG are planning to take down LUNA and STETH. cryptocoin.comAs you followed in , 3AC went bankrupt after the Terra collapse, causing significant losses for DCG and FTX. Losses were above 3AC as Babel and other companies participating in GBTC went bankrupt.
The founder of 3AC continues by saying that Genesis creditors will push him into bankruptcy and will receive the remaining DCG assets in the coming days. Accordingly, “They’re probably asking Barry Silbert to pay back the easy way, rather than waiting for a DoJ criminal case with extradition penalties,” says Zhu Su.
Cameron Winklevoss accuses Barry Silbert and seeks funds
New concerns were triggered by Cameron Winklevoss’s recent open letter to DCG Chief Barry Silbert. DCG, the parent company of asset management firm Grayscale and crypto lender Genesis, is the latest cryptocurrency firm to spark bankruptcy concerns among investors in the crypto space. Amid these concerns, there is growing fear of a possible liquidation of Grayscale’s assets.
Cameron Winklevoss, co-founder of American crypto exchange and custody platform Gemini, has given DCG Chief Barry Silbert until January 8 to reach a decision to repay Genesis’ $900 million debt to Gemini Earn customers. Winklevoss believes Silbert gambled funds on ‘kamikaze’ Grayscale NAV trades.
Meanwhile, Winklevoss accused Silbert of unscrupulous behavior regarding the $900 million debt Genesis owed to Gemini Earn customers. Gemini lent Genesis $900 million from customers of the Income program. This is because of the partnership between the two companies. According to Winklevoss, Genesis lent the funds, along with other creditors’ assets, to its parent company, DCG, bringing the total loan to $1,675 billion. DCG allegedly provided $1.675 billion in loans to Grayscale investments, which were negatively impacted by market-wide turbulence.
What will the cryptocurrency company do next?
Amid these developments, investors are worried about the Grayscale Bitcoin Trust (GBTC) as its premium rate drops to a record 48.62%. Also, the Grayscale Ethereum Trust (ETHE) was recently traded at a record 60% discount. As a result, the crypto community fears that Grayscale may need to liquidate its Trusts to meet its demand for liquidity and pay off DCG and Genesis creditors, including Gemini. List of tokens that such a liquidation could affect include Ethereum Classic (ETC), Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). This is because Grayscale owns a large amount of these assets.
Grayscale holds $10.5 billion worth of BTC, representing 3.28% of the asset’s supply. According to a page shared by an anonymous influencer, the asset manager holds 8.53% of the supply of ETC and 2.52% of the supply of ETH. If it does liquidate these assets, it’s possible that it will have a significant impact on their value. If Grayscale dissolves their Trust, affected shareholders will receive a share of their holdings in either USD or the underlying digital asset. The first, of course, indicates a purge. In particular, it is at the discretion of the sponsor which route to choose. However, DCG may not resort to liquidating Grayscale’s Trusts due to the burdensome nature of the practice and its ultimate effects on the firm. However, investors should not completely ignore the possibility of liquidation.
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