The cryptocurrency community woke up to another day full of drama after the Digital Currency Group (DCG) chief’s letter to shareholders went awry. DCG’s CEO, Barry Silbert wrote a letter to shareholders on January 10, reflecting on the state of the cryptocurrency market and the growing fear, uncertainty and doubt (FUD) surrounding the company. DCG is the parent company of crypto lending firm Genesis Global Capital and Grayscale, the world’s leading crypto asset manager.
In the letter, Silbert addressed the growing problems around DCG and its subsidiaries due to the bear market and FTX contagion. He said bad actors and the implosion of major cryptocurrency companies had wreaked havoc on the industry. He noted: “DCG and many of our portfolio companies are not immune to the effects of the current turmoil.”
I’m incredibly proud of the role that DCG & I have played as pioneers & builders over the past decade. We’ve invested in >200 companies that have developed & shaped the industry, we’ve helped build the first publicly-quoted BTC fund, the largest asset manager in the space..(2/10)
—Barry Silbert (@BarrySilbert) January 10, 2023
I am incredibly proud of the role that DCG and I have played as pioneers and builders over the past decade. We have invested in more than 200 companies that have developed and shaped the industry, we have helped create the first BTC exchange traded fund, the largest asset manager in the space… (2/10)
In the last half of the letter, Silbert addressed some angry questions about DCG’s relationship with FTX, the loan deal with Genesis, and more. He said that Genesis had a “business and lending relationship” with Three Arrows Capital and had invested $250,000 in FTX’s Series B funding round in July 2021. DCG also borrowed $500 million between January and May 2022 at interest rates of 10-12% and currently owes Genesis $447.5 million and 4,550 Bitcoin (BTC), worth $78 million, due May 2022. 2023.
Nevertheless, What puzzled the cryptocurrency community the most was Silbert’s avoidance of addressing Cameron Winklevoss’s allegations that came just hours before his letter.. Winklevoss wrote an open letter to the DCG board on January 10, saying that CEO Barry Silbert was “unfit” to run the company. He also accused Silbert of defrauding clients and hiding behind lawyers. Apparently Genesis owes Gemini $900 million.
One Twitter user wrote that the letter indicates that people may not get their money back. another user questioned Silbert’s tactics of buying GBTC shares by selling borrowed BTC and wrote:
“So you borrowed Bitcoins, sold them, and bought GBTC shares? Otherwise, I’m not sure how you’ll “hedge” GBTC longs with Bitcoins.”
Other members of the crypto community accused Silbert of divert the accusations and they called a la carte a “public relations tactic”.
Laymen terms! I’m Rekt and can’t pay @cameron @tyler @Gemini but I did some neat things along the way! https://t.co/8ZzrE5KIyZ
—KingKong (@KingKon43801491) January 10, 2023
In simple terms! I’m Rekt and I can’t afford @cameron @tyler @Gemini but I did some cool stuff along the way!
Some users they compared their tactics with those of Terraform Labs co-founder Do Kwon, while others they speculated that the letter hinted that Silbert might lose his job in the coming weeks.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.