DCG’s Barry Silbert writes letter to investors after FTX collapse

Barry Silbert, founder of cryptocurrency conglomerate digital currency groupjoined the menu of industry leaders wanting to calm investors’ nerves after FTX’s sudden demise.

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In Tuesday’s note to shareholders, Silbert addressed most of the “noise” regarding the health that is financial of’s subsidiaries. This includes trading companies Genesis, Grayscale Investments, and company that is mining.

FTX Rapid wind down fourteen days ago, investors worried that every corner would be affected by the cryptocurrency epidemic of the industry. Lenders stopped lending, withdrawals became more difficult, regulation disappeared, and the value of a token that is little-understood. major cryptocurrencies, Bitcoin When etheralso continuing their one-year descent.

Silbert, An bitcoin that is early who founded DCG in 2015, said despite the crypto winter, the company as a whole has raised just $25 million in capital since its inception. He said it is on pace to generate $800 million in revenue this year. forbes Silbert’s net worth is estimated at $2 billion.

“We Have survived the crypto winter so far,” wrote Silbert, adding,“This right time it might probably feel much more serious, but we’re going to turn out stronger overall.”

coin base, binance When crypto dot com Similarly, we now have done our better to allay our customers’ concerns in order to avoid FTX-type execution on the deposits. We emphasized which our clients’ assets are safe.

It’s all in recognition that FTX and founder Sam Bankman-Fried have betrayed the trust of a business that has been already in the middle of brutal losses. 2 days he said his company’s assets were “no problem.”The Wall Street Journal reportedUnique to DCG, investor confidence took a hit last week before he desperately wanted a bailout.

Genesis was looking to raise $1 billion from investors, but eventually stopped withdrawing some. GBTCFear Spreads on Grayscale Bitcoin Trust Known for Tickers 42% discount, which allows investors to access Bitcoin through more security that is traditional. GBTC is currently Nearly 30% discount from Bitcoin

2 months ago.

Regarding Genesis’ lending business, Silbert said from inside the letter that the Nov. 16 suspension and redemption of new lending launches was a “liquidity and duration mismatch issue” on the lending book. These issues “have not impacted” Genesis’ spot and derivatives custody or trading businesses, which “continue steadily to operate as normal,” he said.

He confirmed that Genesis is hiring financial and advisers that are legal it considers its options.

DCG has just over $2 billion in debt. The company has loaned Genesis about $575 million, at a price that is expected in May 2023 at the market interest rate that is prevailing. What’s more, it absorbed $1.1 billion in financial trouble owed to Genesis by failed cryptocurrency hedge fund Three Arrows Capital.

With Three Arrows bankrupt, DCG is “pursuing all remedies that are available restore assets to the benefit of its creditors,” writes Silbert. DCG’s only other The liability is a $350 million line of credit from “a group that is small of led by Eldridge.”

Read The letter that is full Silbert below.

To our shareholders

There has been a lot of commotion this week that is past. I wish to contact you straight to clarify the DCG’s position.

Most men and women are alert to the Genesis situation, but to summarize in advance, Genesis’ lending business, Genesis Global Capital, closed Wednesday, November 16, after market turmoil sparked withdrawal that is unprecedented. We have temporarily suspended redemptions and loan that is new. Importantly, these presssing issues have not impacted Genesys’ spot and derivatives trading or custody businesses, which continue to operate as normal. Genesis management and its board of directors have decided to hire financial and counsel that is legal while the company is exploring all possible options from inside the aftermath of his FTX implosion.

Recently, there is talk of an intercompany loan between Genesis Global Capital and DCG. If you do not know, from inside the course that is normal of, DCG has borrowed money from Genesis Global Capital like hundreds of cryptocurrency investment firms. These loans are always structured on an arm’s length basis and priced at prevailing market interest rates. DCG currently owes Genesis Global Capital approximately $575 million and is due to be repaid in May 2023. These loans were used to fund investment opportunities and to buy his DCG shares back from non-employee shareholders in a second transaction previously highlighted from inside the quarterly shareholder update. In order to this very day, We have never sold a share that is single of DCG stock.

You may also recall that there is a $1.1 billion note that is promissory in June 2032. While we shared inside our shareholder that is previous letter August 2022, DCG stepped in and assumed certain liabilities from Genesis related to Three Arrows Capital’s default. These are now DCG’s liabilities, DCG is participating in the Three Arrows Capital liquidation proceedings of the Board of Creditors and will be used to recover the assets for the benefit of its creditors as we noted in August. The audience is pursuing all remedies that are possible. Aside from Genesis Global Capital’s intercompany loan and long-term note that is promissory in May 2023, DCG’s only debt is a tiny lender led by Eldridge. A $350 million credit line through the combined group.

Let me take a step back and clarify. DCG continues to be an industry-leading builder and is committed to its long-term mission to accelerate the development of a better system that is financial. We have weathered the crypto winter thus far, and it will come out stronger overall while it may feel more severe this year. DCG has raised only $25 million in initial funding and he is on pace to bring in $800 million in revenue this

I year bought my first bitcoin ten years ago in 2012 and made a commitment that is long-term the industry. The world’s largest digital currency asset management company in 2013, he founded his first BTC trading company, Genesis, and his first BTC fund, which has now evolved into Grayscale. Foundry operates the entire world’s bitcoin mining pool that is largest, building tomorrow’s decentralized infrastructure. CoinDesk, the premier media, data and events company in the industry, has done an job that is amazing this crypto winter. Luno is amongst the world’s most crypto that is popular and an industry leader in emerging markets. TradeBlock is building a seamless institutional trading platform and HQ is the subsidiary that is latest to determine an income and wealth management platform for digital asset entrepreneurs. Each one of these subsidiaries is an business that is independent is independently managed and operating normally. Finally, with a portfolio of over 200 companies and funds, we often check the industry’s best founders first.

Thank you for your words of encouragement and support along with your offer to invest in DCG. We will let you know. Grayscale Files Lawsuit Against SEC Over Bitcoin ETF Rejection

Despite the tough times in the industry, I am as excited as ever about the possibilities of cryptocurrency and blockchain technology for decades to come, and DCG is determined to stay at the forefront if we decide to do a funding round. (*)Barry(*)look:(*)

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