Digital Currency Group is facing problems on multiple fronts.
- Digital Currency Group brought old problems into the new year.
- Gemini co-founder Cameron Winklevoss posted an open letter criticizing DCG CEO Barry Silbert’s actions with regards to Genesis’ liquidity crunch.
- Grayscale’s Ethereum Trust is also trading at a record discount of -60%.
Barry Silbert’s woes continue as Cameron Winklevoss ratchets up the pressure, Gemini Earn customers file for class-action arbitration, and Grayscale’s Ethereum Trust trades at its lowest discount ever.
New Year, Same Problems
Digital Currency Group and its subsidiaries are still suffering from FTX-related liquidity issues.
Yesterday, Gemini co-founder Cameron Winklevoss published an open letter on Twitter in which he accused DCG founder Barry Silbert of “engaging in bad faith stall tactics” with regards to Genesis’ current liquidity problem.
Genesis is a crypto lending company and a subsidiary of Digital Currency Group. The firm paused redemptions and new loan originations on November 16, citing “unprecedented market turmoil” due to the FTX collapse. As a result, Gemini was forced to halt its Earn Program, which relied on Genesis to provide lending services to Gemini customers.
Winklevoss claimed that Silbert had been hiding “behind lawyers, investment bankers, and process” for the past six weeks to avoid meeting face-to-face with Gemini heads. According to Winklevoss, Genesis owes Gemini customers approximately $900 million, while DCG itself owes Genesis $1.675 billion. Silbert shot back with a tweet claiming that DCG had not borrowed $1.675 billion from Genesis, and that the company had delivered a relevant proposal on December 29 to both Gemini and Genesis—with no response from Gemini.
Three Gemini Earn users have also reportedly filed a request for class-action arbitration against DCG and Genesis, alleging that Genesis is breaching the Master Agreement between the firm and its users by failing to return Gemini Earn clients’ digital assets. A related class-action lawsuit has already been filed against Gemini.
Meanwhile, Grayscale’s Ethereum Trust (ETHE) has hit a record discount of -60%, meaning that the investment product is trading for 60% less than the value of its underlying assets. Grayscale is another DCG subsidiary; the discount can be attributed to pessimistic investor outlook with regards to DCG solvency, with regards to the crypto market in general, and with regards to the Trust itself being approved as a spot ETF.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
Genesis Sought $1B Loan Before Halting Redemptions
Early this week, crypto lending firm Genesis sought a $1 billion emergency loan from investors without success before halting withdrawals Wednesday. Genesis Sought Emergency Loan Genesis Global Trading sought an…
FTX Contagion: Genesis and Gemini Hit in Crypto Chaos
Genesis Global Capital has temporarily suspended redemptions and new loan originations following the spectacular collapse of the FTX cryptocurrency exchange. Genesis, Gemini Hit by FTX Contagion Early signs of contagion…
Genesis CEO Steps Down as Firm Cuts 20% of Staff
Institutional crypto broker Genesis Global Trading has announced that its CEO Michael Moro is resigning and it will be cutting 20% of its workforce. The move marks further fallout from…