Following the FTX bankruptcy filing, the crypto market could not help to let other entities get along safely without its effect. Genesis emerged as another hot topic amidst the chaos as the firm indicated to file for bankruptcy following the FTX collapse.
Being the parent company of Genesis Global Trading, venture capital firm Digital Currency Group (DGC) has also become the subject of discussion. The company has cleared that it does not have any exposure to any bad loans of Genesis. DGC CEO noted additional information about the same.
Reuters reported that DGC Chief Executive Officer Barry Silbert shared a letter to shareholders. In the letter, Silbert explained that Digital Currency Group owes the Genesis Global Capital an amount of 575 million USD. The latter is a crypto lending subsidiary of Genesis Global Trading.
Genesis halted the withdrawals over the platform since the firm was unable to continue amidst the tough market conditions that emerged after the FTX collapse.
Meanwhile Genesis was reported to approach major crypto exchanges and an asset manager for assistance. The company is seeking to raise a capital amount of 1 billion USD and so.
Silber added in the note that the firm would like to have support and receive offers of investment. He added that in case the company decides to go for a funding round in the near future.
Since the companies are in strong ties with each other, it becomes likely for them to get affected. Apart from the DGC, Grayscale also has to suffer the consequences of its acquaintance with Genesis. Both the companies fall under the umbrella of Digital Currency Group.
Grayscale Bitcoin Trust (GBTC) Fund, one of the largest bitcoin (BTC) funds, found itself in an embattling situation amidst the potential threat from so-called Genesis bankruptcy filing. This went on to affect GBTC stock price which witnessed a drop up to 5% in a day.
GBTC had to come forwards for the clarification that bitcoin reserves of the bitcoin fund are safe. The firm has no exposure to Genesis as such and it will not likely face the impact of halting withdrawals. Moreover, to make people believe the claims, it went on to conduct a lookout on its bitcoin reserves. It reported after the assessment that Grayscale holds about 635,235 BTC as of now.
However, the drop could not be reverted back. Citing it as an opportunity, investors went on to buy GBTC stock on discount. This prominently included Cathie Wood’s Ark Invest.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.