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New Plans Are Made With DCG Fear of Bankruptcy


The cause of the new concern is Cameron Winklevoss’ open letter to DCG chief Barry Silbert.

Digital Currency Group (DCG), the parent company of asset management firm Grayscale and crypto lender Genesis, is the latest to raise liquidity concerns among investors in the crypto space. Among these concerns, there is a growing fear of Grayscale’s divestment.

Cameron Winklevoss, co-founder of the US crypto exchange and holding platform Gemini, has given DCG president Barry Silbert until Jan. 8 to reach a settlement that will return $900 million to Genesis’ Gemini Earn business. Winklevoss believes Silbert spent the money on “kamikaze” transactions at Grayscale NAV.

Winklevoss accused Silbert of misconduct regarding Genesis’ $900 million debt owed by Gemini Earn customers. Gemini borrowed $900 million in cash from its customers Access Program and Genesis. This is because of the relationship between the two companies. According to Winklevoss, Genesis, in turn, lent the money to DCG, its parent company, as well as assets from other creditors, bringing the total amount to $ 1.675.

DCG reportedly invested $1.675 million in a gray investment, which has been hit hard by the market turmoil. Recall that The Crypto Basic previously reported that investors are worried about Greyscale Bitcoin Trust (GBTC) as its peak value fell to a record low of 48.62%. It was also recently reported that Grayscale Ethereum Trust (ETHE) is trading at a record 60% discount.

Apparently, Genesis stopped taking out customers last November, citing a drought caused by the FTX crash. After borrowing Earn it from Genesis, Gemini will pause withdrawals from its Earn program. As a result, the crypto community fears that Grayscale may breach its trust to meet funding needs and repay DCG and Genesis creditors, including Gemini.

The list of tokens that may be affected by such a sale includes Ethereum Classic (ETC), Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). This is due to Grayscale’s large holdings of these assets.

Grayscale holds $10.5 billion BTC, which is 3.28% of the assets. The asset manager also holds 8.53% of the ETC supply, and 2.52% of the ETH supply, according to a document shared by an anonymous person. The loss of these assets will have a significant impact on their value. As mentioned in a previous report, if Grayscale dissolves its trust, the affected shareholders will receive either a share of their USD holdings or the underlying digital assets. The first, of course, indicates liquidation. Above all, it is the sponsor’s right to decide which way to go.

However, DCG may not begin to undermine Grayscale’s credibility due to the nature of the exercise and the impact it has on the business. However, users cannot completely rule out the possibility of liquidation, as Grayscale did with its XRP holding following the US Securities and Exchange case against Ripple.

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