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Grayscale’s parent company reportedly owes $1.1 billion to Genesis

by Chiwuike Owunwa
Nov 21, 2022 - 12:00 am
in Blockchain
Grayscale's parent company reportedly owes $1.1 billion to Genesis

On the 21st of November 2022, Andrew Parish, the co-founder of Arch Public released a tweet about Digital Currency Group (DCG) owing $1.1 billion to Genesis.

https://twitter.com/AP_ArchPublic/status/1594386225200234496

The crypto sector has been having a difficult time. From FTX collapsing to the pressure on Ethereum’s selling price and with a huge distrust for centralized projects building, it seems DCG, Genesis, and GBTC are making headlines as the next to go the way of FTX.

According to Andrew’s tweet, an internal memo that was not disclosed to the public showed a 1.1 billion dollar debt between the parent company, DCG, and child company, Genesis. This is potentially a fraudulent act because fully disclosing such a memo would have discouraged certain investors from taking action toward Genesis.

It’s also believed that this is the reason behind this DCG and Genesis $1 billion fundraiser. With Genesis suffering $175 million exposure to the FTX crash, and DCG attempting to support Genesis with $140 million, there are signs of trouble. Genesis has also halted operations surrounding withdrawals and the creation of new loans on its platform.

If the information is true then DCG and Genesis are potentially in a bad position and their predicament would affect CBC which is also currently going through its issues. Thus if Genesis dies, DCG goes too and they might drag Grayscale down with them.

In light of all these, affecting the digital currency group of companies, Grayscale bitcoin trust has refused to show proof of its reserves.

Since FTX was fraudulent in its holdings and accounting, investors are poking into the claims of other centralized establishments. As a result of this, multiple projects like Binance and Kucoin started working with Nansen.

[NEW TODAY] Due to recent events, investors are understandably inquiring deeper into their crypto investments. In this thread we’ve compiled additional information about the safety and security of the assets held by our digital asset products. https://t.co/MvTfUoK4o6 🧵

— Grayscale (@Grayscale) November 18, 2022

In response to this, Grayscale released a  statement assuring users that all funds are safe, they are held as separate entities, and by legal stipulations, they are not allowed to lend or borrow any of said assets.

For security reasons they cannot disclose the assets they are holding and it’s all in the custody of yet another DCG subsidiary… Coinbase.

Simply put, panic caused by others’ failures isn’t a good enough reason to circumvent their complex security procedures.

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Tags: GenesisGrayscale
Chiwuike Owunwa

Chiwuike Owunwa

Chiwuike is a frontend programmer and writer with 3 years experience in the Web3. He's meticulous researcher, enthusiastic about Blockchain and the future of crypto, DeFi, and the Metaverse.

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