{"id":178729,"date":"2023-10-22T00:24:31","date_gmt":"2023-10-21T18:54:31","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=178729"},"modified":"2023-10-22T00:24:31","modified_gmt":"2023-10-21T18:54:31","slug":"whats-going-on-with-crypto-behemoth-digital-currency-group-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/whats-going-on-with-crypto-behemoth-digital-currency-group-crypto-news\/","title":{"rendered":"What\u2019s Going On With Crypto Behemoth Digital Currency Group? – Crypto News"},"content":{"rendered":"
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Crypto behemoth Digital Currency Group (DCG) is one of the biggest players in the crypto industry.<\/p>\n

The conglomerate has roughly 200 companies in its portfolio. One of the best known is Grayscale, manager of the eponymous Grayscale Bitcoin Trust<\/a>. It’s world\u2019s largest Bitcoin fund which opened the door to institutional investors as a private trust in 2013 and got approval to trade publicly under the GBTC ticker in 2015.<\/p>\n

But DCG has run into a lot of trouble since the crypto crash of last year. Genesis Global, its digital asset lender, went bankrupt in January, then last month announced<\/a> it would cease all operations.<\/p>\n

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And this week, the New York Attorney General\u2019s office hit<\/a> DCG, its subsidiary Genesis Global Capital, and crypto exchange Gemini Trust, alleging the companies defrauded customers of $1.1 billion.<\/p>\n

Here\u2019s a breakdown of DCG and how it got to where it is now.<\/p>\n

2015 \u2014 Founding and first fundraiser<\/p>\n

DCG was founded in 2015 by Barry Silbert, the ex-CEO and founder of SecondMarket, which is now known as Nasdaq Private Market. The idea, Silbert said at the time, was to have DCG structured like a company\u2014despite it being an entity that invests in Bitcoin companies.<\/p>\n

It secured funding from the likes of Bain Capital Ventures, FirstMark Capital, MasterCard, and New York Life when it launched.<\/p>\n

January 2016 \u2014 Digital Currency Group buys CoinDesk<\/p>\n

DCG bought crypto news publication CoinDesk in 2016 for an undisclosed amount. Reports at the time put the deal<\/a> at around $500,000 to $600,000.<\/p>\n

November 2021 \u2014 Big investment<\/p>\n

DCG secured major investment, with Japanese multinational Softbank leading a $700 million investment round. Google\u2019s parent company Alphabet Inc. also took part.<\/p>\n

At the time, Digital Currency Group was valued at $10 billion and SoftBank Group International CEO Marcelo Claure described its shares as \u201cbasically the single-best asset that gives us the diversity of exposure to crypto, A-Z.\u201d<\/p>\n

April 2021\u2014 Plans to turn Bitcoin fund into an ETF announced<\/p>\n

Grayscale announces<\/a> that it plans to turn GBTC, which at the time had $38.8 billion under management, into an exchange-traded fund (ETF)\u2014something investors are hungry for.<\/p>\n

“We are 100% committed to converting GBTC into an ETF,” the firm said at the time. It added: “The timing will be driven by the regulatory environment.\u201d<\/p>\n

June 2022 \u2014 Grayscale sues the SEC<\/p>\n

The regulatory environment proved a big challenge for the firm. A year after beginning its efforts to convert GBTC, Grayscale sued<\/a> the U.S. Securities and Exchange Commission after the regulator had repeatedly denied Grayscale\u2019s application to turn its flagship fund into an ETF.<\/p>\n

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We\u2019ve filed a lawsuit against the SEC. $GBTC<\/a><\/p>\n

\u2014 Sonnenshein (@Sonnenshein) June 30, 2022<\/a><\/p>\n<\/blockquote>\n<\/div>\n

The firm\u2019s lawyer Donald B. Verrilli, Jr. claimed that the SEC was \u201cacting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934\u201d in denying the application.<\/p>\n

November 2022 \u2014 Genesis announces that it\u2019s stopping withdrawals<\/p>\n

Meanwhile, trouble was brewing for Genesis. It had made billion of dollars in loans to several beleaguered firms\u2014Three Arrows Capital and Alameda Research\u2014that were about to default on their debt as a result of market contagion stemming from the collapse of TerraUSD.<\/p>\n

By November, when mega digital asset brand FTX collapsed, Genesis announced<\/a> to clients that it would pause withdrawals from its lending arm due to the \u201cunprecedented market turmoil.\u201d Digital Currency Group then stepped in to give a helping hand with $140 million in equity.<\/p>\n

The firm\u2019s lawyer Donald B. Verrilli, Jr. claimed that the SEC was \u201cacting arbitrarily and capriciously in violation of the Administrative Procedure Act and Securities Exchange Act of 1934\u201d in denying the application.<\/p>\n

December 2022 \u2014 Digital Currency Group’s Gemini troubles<\/p>\n

Crypto moguls the Winklevoss twins chimed in because their New York-based crypto exchange Gemini was involved: Genesis served as the primary lending partner of the Gemini Lend program, which helped Gemini USD (GUSD) holders earn interest on their deposits. But when Genesis suspended withdrawals, it owed $900 million to users of the high-yield savings product.<\/p>\n

In an open letter to DCG CEO Barry Silbert, Cameron Winklevoss said on Twitter that he was using \u201cbad faith stall tactics<\/a>.\u201d<\/p>\n

Genesis interim CEO Derar Islim responded by asking for more time to sort out the mess.<\/p>\n

January 2023 \u2014 Genesis collapses, reveals exposure to FTX<\/p>\n

Genesis Global Capital filed<\/a> for bankruptcy protection. It also said that it had exposure to failed crypto company FTX; debtors accused<\/a> it of being one of the main \u201cfeeder funds\u201d to the disgraced exchange.<\/p>\n

After, FTX\u2019s new management reached a $175 million settlement<\/a> with Genesis.<\/p>\n

August 2023 \u2014 Grayscale win<\/p>\n

2023 has been a tough year but it\u2019s not all negative news: a federal judge decided to overturn<\/a> the SEC\u2019s decision to block Grayscale from converting its Bitcoin trust into a spot ETF.<\/p>\n

The ruling was seen as a win for not only Digital Currency but the industry as a whole as a judge essentially sided with the crypto world\u2014and potentially speed up the process of getting a spot Bitcoin ETF approved in the U.S.<\/p>\n

September 2023 \u2014 Gemini Earn<\/p>\n

Digital Currency Group (DCG) announced<\/a> that Gemini Earn customers could see 95% to 110% recovery on their claims in a bold new deal following months of uncertainty.<\/p>\n

\u201cThis is a remarkable outcome for any liquidating chapter 11 case, let alone one in the volatile cryptocurrency industry,\u201d the company said in a statement.<\/p>\n

2023 \u2014 NYAG lawsuit and accusations<\/p>\n

Just as it appeared things were being ironed out between Genesis and Gemini, the New York Attorney General\u2019s office hits<\/a> Genesis Global Capital, Gemini Trust, and Digital Currency Group (DCG) with a lawsuit.<\/p>\n

Silbert is mentioned in the lawsuit, which alleges that \u201cthese cryptocurrency companies lied to investors and tried to hide more than a billion dollars in losses, and it was middle-class investors who suffered as a result.\u201d<\/p>\n

Edited by Stacy Elliott<\/a>.<\/i><\/p>\n

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Crypto behemoth Digital Currency Group (DCG) is one of the biggest players in the crypto industry. The conglomerate has roughly 200 companies in its portfolio. One of the best known is Grayscale, manager of the eponymous Grayscale Bitcoin Trust. It’s world\u2019s largest Bitcoin fund which opened the door to institutional investors as a private trust […]<\/p>\n","protected":false},"author":2,"featured_media":178730,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-178729","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/178729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=178729"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/178729\/revisions"}],"predecessor-version":[{"id":178732,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/178729\/revisions\/178732"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/178730"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=178729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=178729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=178729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}