As a result of the chain reaction started by former CEO Sam Bankman-Fried, the collapse of FTX has spread, and now more large crypto ventures are now in danger of going bankrupt.
The Grayscale Bitcoin Trust (GBTC), the largest institutional crypto investment vehicle, has recently come under the limelight after it was discovered that cryptocurrency platform Genesis Global was also having financial issues and had stopped processing payments.
A significant source of liquidity for the Grayscale Bitcoin Trust is Genesis Global. The Digital Currency Group, the parent company of both Genesis and Grayscale, As a result, Grayscale is probably going to suffer from Genesis’ financial difficulties.
Since just 80,000 BTC were involved when Terra fell, the impact would be higher if the Grayscale Bitcoin Trust’s current holdings of 634,000 BTC were liquidated for cash.
Genesis is not a service provider for any Grayscale products, according to the DCG, and recent events have no impact on how business is conducted.
Similar remarks on FTX were made a few days ago.
Agree with this, the fears around unwinding $GBTC & $ETHE is unfounded, an example of hysteria. https://t.co/VT2BjUE5kT
— Chris Burniske (@cburniske) November 18, 2022
Ryan Selkis, founder and CEO of cryptanalysis firm Messari, said DCG’s cash was lower than its debt.
Oh boy,
As per @twobitidiot, Genesis' holding company Digital Currency Group, the issuer of $GBTC, is experiencing a liquidity crunch.
"Appears holding company's (DCG) liquid assets are below liabilities". As a result, it looks like DCG is looking to raise outside funding. https://t.co/LvZ7inchYo
— Dylan LeClair 🟠 (@DylanLeClair_) November 17, 2022
In the interim, it is reasonable to question whether Grayscale actually owns 634,000 BTC. There is only a CSV file that is updated once per day; there is no actual proof.
Does anyone know of the addresses for the 630k BTC in $GBTC? Are there some form of proof of reserves and if no, why?
We have a fully transparent public ledger so we can audit this stuff.
All I can find is a CSV file that updates daily. Why not publish the addresses?
— Dylan LeClair 🟠 (@DylanLeClair_) November 17, 2022
 has come under the limelight after it was discovered that cryptocurrency platform Genesis Global was also having financial issues and had stopped processing payments. Since just 80,000 BTC were involved when Terra fell, the impact would be higher if the GBTC were liquidated for cash.){kind=link}