Summary:
- DCG has started selling assets held by Grayscale, the Financial Times reported.
- Recent SEC filings show that most of its holdings sales have come from the company’s Ethereum fund.
- The group hopes to raise cash to meet more than $3 billion in creditor claims from Gemini and other entities.
- DCG just reached an agreement with creditors regarding its bankrupt Genesis crypto lending and trading businesses.
Barry Silbert’s Digital Currency Group (DCG) initiated trades to sell off discounted holdings controlled by its asset management subsidiary Grayscale, per the Financial Times.&
The outlet cited filings with the U.S. Securities and Exchange Commission that showed Silbert’s group offloading assets from its Ethereum fund dubbed the Grayscale Ethereum Trust (ETHE). Filings revealed that DCG’s Grayscale has raised around $22 million since late January, offloading discounted ETHE shares at $8 per share.&
Tuesday’s report from FT quoted a DCG spokesperson who said the assets sales were part of a “portfolio rebalancing” process as the group hopes to raise enough liquidity to settle creditors and strengthen its books.
The asset management juggernaut with over $10 billion in AUM also offers a popular Bitcoin product known as the Grayscale Bitcoin Trust (GBTC). GBTC also trades at a massive discount price compared to its net asset value.
DCG And Genesis Agree Deal With Creditors
News about Grayscale’s discounted asset sales came shortly after DCG and its crypto lending subsidiary Genesis reached an agreement with creditors to bail out the firm. The agreement will see Silbert’s group sell off its crypto lending and trading businesses in Genesis as the subsidiary weathers bankruptcy.&
Genesis which filed for chapter 11 protection after massive exposure to fallen crypto entities in 2022 owes more than $3 billion to creditors. These creditors include Winklevii-founded Gemini, a crypto exchange that claims Genesis owes north of $700 million to over 340,000 Gemini Earn users.
Gemini and Genesis have been entrenched in a public feud recently with the former threatening legal actions against Silbert’s companies.&
DCG’s lending and trading affiliate suffered massive exposure in the hundreds of millions to former crypto powerhouses companies like hedge fund Three Arrows Capital and FTX crypto exchange. Both companies have also filed for bankruptcy and are currently in court to reach agreeable settlements with creditors.
Michael Moro stepped down as CEO amid layoffs and bankruptcy restructuring at the crypto lending giant back in August 2022.
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