On Jan. 10, DCG CEO Barry Silbert reflected on the state of the crypto industry and the rising waves of speculation about his company in the wake of the FTX fallout and contagion.
Silbert acknowledged that 2022 was a difficult year and that DCG and its subsidiaries were not immune to the effects of the current crisis.
In a veiled stab at critics, he added that it has been a challenge.
“It has been challenging to have my integrity and good intentions questioned after spending a decade investing everything in this company and space with a relentless focus on doing things the right way.”
I’ve been reflecting on the past year quite a bit, the state of the industry and where things go from here.
Here’s an update to address those thoughts, other developments, and some speculation on @DCGco (1/10)https://t.co/xEohthubvD
—Barry Silbert (@BarrySilbert) January 10, 2023
DCG under fire
Digital Currency Group has been in the spotlight recently as it is the parent company of beleaguered crypto lending firm Genesis. It is also the parent company of Grayscale, the world’s largest crypto asset fund manager.
Genesis suspended loan originations and redemptions in mid-November, sparking problems with the Gemini exchange, which had $900 million in outstanding loans with the company.
Earlier this month, Gemini co-founder Cameron Winklevoss gave Silbert an ultimatum to pay what he owed. On January 10, Winklevoss called for Silbert’s removal as CEO, saying he was unwilling to find a solution.
In his own letter, Silbert said that DCG owed Genesis Capital $447.5 million and 4,550 BTC (worth about $78 million), due in May 2023. DCG borrowed $500 million between January and May 2022 at interest rates of 10% to 12%, he added. .
Regarding the relationship with FTX, he said that DCG made a small equity investment of $250,000 in Series B of the defunct exchange in July 2021.
“DCG had a trading account with FTX with less than 1% of all our trading volume traded on that platform,” he continued.
DCG also holds shares in Grayscale’s Bitcoin Trust (GBTC), and this is what has observers uneasy. According to a November 24 Financial Times report, DCG has bought $722 million worth of GBTC since March 2021.
In addition, the investment was financed with loans from Genesis. Grayscale’s BTC Trust is currently trading at a -38.5% discount. Silbert concluded that the company is still current on its loan payments.
“DCG has not borrowed from Genesis Capital since May 2022, has never missed an interest payment, and is current on all outstanding loans.”
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This post DCG CEO Barry Silbert Addresses Speculative Shareholder Letter
was published first on https://cryptopotato.com/dcg-ceo-barry-silbert-addresses-speculation-in-letter-to-shareholders/