On November 18, Grayscalethe asset manager that runs the world’s largest Bitcoin (BTC) fund, released a statement detailing the security of its digital asset products and says it will not share its proof of reserves with clients.
“Due to recent events, investors are understandably looking more into their cryptocurrency investments,” the statement begins, which is quite an understatement after the FTX implosion and the investigation into the dubious leadership of Sam Bankman-Fried. Before long, the question on everyone’s lips became evident. Will Grayscale be next?
The answer is that it is unlikely.. And that’s largely because the people at the top, those who have made Grayscale what it is seem to be more competent than Sam Bankman-Fried ever was..
Let’s look at the facts.
It is certain and possibly undeniable that the cryptocurrency industry will go under again if Grayscale does not fix its balance sheet.. The space simply can’t afford another drop, not so soon after FTX and not that of such a major player. Grayscale oversees more than $10 billion worth of BTC, Ether (ETH) and other assets and represents its parent company’s largest revenue generator.
Grayscale’s parent company—the same company that owns trading firm Genesis, mining company Foundry, cryptocurrency investing app Luno, and news outlet CoinDesk, among others—is Digital Currency Group, whose founder and CEO Barry Silbert shared a note to DCG shareholders on November 23 addressing all the “noise” surrounding the company. He indicated that despite the so-called crypto winter, the company was on track to hit $800 million in revenue and its separate entities were “business as usual”.
“We have weathered previous crypto winters,” the CEO note read, “and while this one may seem more severe, we will collectively come out of it stronger.”
Silbert is an early bitcoin evangelist and a true cryptocurrency enthusiast.. But unlike Sam Bankman-Fried, tHe has 28 years of experience under his belt. Before discovering cryptocurrencies, was an investment banker in New York and was the CEO of the Second Market stock trading platform, which he sold to Nasdaq in 2015. This is not, in other words, his first rodeo.
Silbert, along with Grayscale’s own management, has also been in a parallel fight with the US Securities and Exchange Commission after regulators rejected its request to convert its flagship product, the Grayscale Bitcoin Trust (GBTC), into a spot bitcoin exchange-traded fund (ETF), the first in the United States. The SEC did so by claiming that “the investment manager had not responded to questions about concerns around market manipulation” and poor investment protection, but it could also be argued that if they had accepted the offer, the cryptocurrencies they would have had the opportunity to “open up to more institutional investment” and potentially avoid the current decline we are experiencing.
Grayscale then filed a petition challenging the decision with the United States Court of Appeals for the District of Columbia. and proceeded to sue the control body for what described as “arbitrary, capricious and discriminatory” ruling.
In other words: For anyone who cares about the future of cryptocurrency and believes in the importance of regulators acting in good faith to move the industry forward, Grayscale is fighting a good fight..
“The panic caused by others is not a sufficient reason to circumvent the complex security arrangements that have kept our investors’ assets safe for years”, noted the Grayscale statement of November 18. They have proven their worth and upheld their reputation with a decade-long track record of steady growth. This is unlikely to change anytime soon.
Daniele Servadei He is the co-founder and CEO of Sellix, an e-commerce platform based in Italy.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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