This Event Could Trigger Big Cryptocurrency Sale! – Cryptokoin.com

According to new reports, Genesis, a subsidiary of Digital Currency Group (DCG), owes more than $3 billion to its customers. The crypto company’s use of its portfolio to mitigate the impact of the crisis is threatening massive selling pressure.

Genesis’ crisis management directly concerns the cryptocurrency market

Crypto lending platform Genesis currently owes its customers up to $3 billion. According to the Financial Times, parent company DCG is considering selling its Venture Capital Holdings, which includes up to 200 crypto-related projects such as exchanges, banks and custodians in at least 35 countries, to close this gap.

Since the collapse of Three Arrows Capital (3AC), Genesis has become DCG’s open wound. The company’s $447.5 million and 4,550 Bitcoins (BTC) worth $78 million are currently suspended in bankrupt 3AC. However, the $175 million stuck after the FTX bankruptcy that occurred in November adds to the firm’s woes.

As a parent company, DCG has stepped in multiple times to assist Genesis. In fact, it currently owes up to $1.6 billion to the subsidiary. The first installment of DCG’s debt to Genesis is due in May, and all eyes are on the company to see if it defaults on that payment. Currently, DCG believes that support from other ground companies can alleviate the crisis. ABRA, Acala Network, AVANTI Bank, BitFlyer and Chainalysis are among other bankrupt companies in its portfolio.

The situation with DCG and Genesis caused a number of woes, particularly as it involved the Gemini exchange, which former DCG owed $900 million from interest-bearing Earn Program customers. Even though Gemini has stopped the Earn program, it is determined to get Genesis to repay all the monies it owes its users.

Is Bitcoin in Danger?

In the midst of the crisis, Bitcoin (BTC) permanently surpassed $20,000 for the first time in over a month, ignoring the overall negative sentiment. However, this impressive trend is under threat as problems at DCG and Genesis could spill over to Grayscale Investments, another subsidiary of the company that invests directly in Bitcoin.

If the current liquidity crisis spreads to Grayscale, as many as 635,000 Bitcoin units tied to the DCG empire will be at risk, and the market will undoubtedly respond to this threat in the near future. cryptocoin.com In this article, we have included what Gemini founder Cameron Winklevoss wrote in an open letter to DCG CEO Barry Silbert. Also, the US regulator now sees companies as threats in the SEC.

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