Digital asset manager Grayscale Investments seeks to reassure investors that they will not be affected by Genesis Global Capital’s suspension of withdrawals following FTX’s collapse.
Grayscale Says Its Products and Services Are Not Affiliated With Its Sister Company Genesis
According to Amanda Cowie, vice president of communications and marketing at Grayscale, Genesis and their parent company, Digital Currency Group (DCG), Genesis Global Capital, the lending arm of Genesis Global Trading, said Wednesday that “the extreme market turmoil and industry confidence caused by the FTX crash. announced that the withdrawals were stopped in response to the loss of money.
Grayscale announced on Twitter on Wednesday that “Genesis Global Capital is not a counterparty or service provider for any Grayscale product.”
“Grayscale products continue to operate as usual and recent events have had no impact on product operations,” he added.
The company’s largest product and investors to Bitcoin (BTC) Grayscale Bitcoin Trust (GBTC), a fund in which it bought shares for investment, was trading at a 39.8% discount to its net asset value (NAV) on Tuesday.
In the wake of recent events, our investors should know that the safety and security of the holdings underlying Grayscale digital asset products are unaffected. 🧵
— Grayscale (@Grayscale) November 16, 2022
The discount narrowed slightly to 37.1% on Tuesday, as Ark Investment Management bought 315,259 shares of this investment vehicle for the first time since July 2021. However, the discount widened as GBTC fell nearly 7% on Wednesday and Bitcoin had been relatively flat in the past hour.
Despite Grayscale’s claims, fears of the spread of Genesis’ plight will likely persist.
“The bad debt on Genesis’ balance sheet will need to be recapitalized immediately by DCG,” Bernstein Research analyst Gautam Chhugani wrote in a note Wednesday.
Last week, Genesis announced that its derivative arm has approximately $175 million in locked funds in its FTX trading account.
*Not investment advice.
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