- Grayscale Investment is in the spotlight for owing Genesis $1 billion.
- Derar Islim says that the main cause of suspension is due to rise in withdrawal demands.
- Meanwhile, total market cap of crypto is down by 70% at $831 billion.
After a week of the FTX collapse, Digital Currency Group (DCG) and its two subsidiaries, Genesis and Grayscale Investments, are in the spotlight.
Grayscale Investment is a subsidiary of Digital Currency Group, which is currently in the spotlight for owing Genesis $1 billion. Grayscale Investments stopped accepting withdrawals from its Grayscale Bitcoin Trust (GBTC) last week.
Genesis handed Do Kwon $1B in Bitcoin – real, hard money – in exchange for 1B UST tokens that TFL printed out of thin air.Do Kwon's wistful comment on the trade is amusing, since he's probably laughing behind the screen at how he pulled off one of the greatest cons of all time. pic.twitter.com/DqXHHDom81— FatMan (@FatManTerra) November 20, 2022
On Monday morning, November 21, the crypto market was in the red, leading to declines in the value of numerous significant coins, with BTC at $15,985.50 and ETH at $1,120.80.
Prior to stating that it was stopping the withdrawal, Genesis Trading attempted to raise $1 billion as well, according to Wall Street Journal.
Regarding these speculations, analysts suggest that DCG and Genesis may not be as good of shape as they claim, which could affect other companies in the same network, like mining firm Grayscale and Foundry.
This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.— Digital Currency Group (@DCGco) November 16, 2022
Derar Islim, Genesis’ interim CEO, said:
We’re suspending redemptions as we increase liquidity in the Genesis platform. We want to ensure that our members can maintain their positions and earn rewards
On Wednesday, Genesis made its initial announcement about stopping withdrawals and declared that its Gemini Earn program would be ending.
At that time, Genesis stated that their decision to halt services was motivated by “severe market disruption and loss of industry confidence” by FTX’s demise. However, it didn’t say anything about its own liquidity at press time.
Due to the sudden failure of FTX and Alameda following the extreme fear of traders, the crypto market is still highly fragile, making it easy for rumors to circulate.
On November 9, 2021, the overall market cap of the crypto sector topped $2.8 trillion. At the time of publication, the market cap was down 70% at $831 billion.
If DCG, Greyscale, or Genesis experience unmanageable financial hardship, a potential catalyst for the market to test the 2018 bottoms may enter the picture.
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