Investing.com – FTX’s downfall continues to widen, so it’s no longer just small crypto projects that are on the verge of bankruptcy following the chain reaction unleashed by former CEO Sam Bankman-Fried.
After learning that crypto platform Genesis Global was also in trouble and suspended payments, the largest institutional crypto investment vehicle, the Grayscale Trust (GBTC), finds itself in the spotlight.
Genesis Global is a leading liquidity provider for the Grayscale Bitcoin Trust. Both Genesis and Grayscale have the same parent company, the Digital Currency Group (DCG). As a result, Genesis’ lack of cash is likely to spill over to Grayscale.
The Grayscale Bitcoin Trust currently holds 634,000 BTC and if these were to be sold for cash, the impact would be greater than during the collapse of , as only 80,000 BTC were in play then.
The DCG advised that Genesis is not a service provider for any Grayscale product and that recent events have no bearing on business operations.
Similar comments were made a few days ago about FTX.
Ryan Selkis, founder and CEO of cryptanalysis firm Messari, said DCG’s cash was lower than its debt.
In the meantime, one rightly wonders if Grayscale is really in possession of 634,000 BTC. There is no real proof, only a CSV file which is updated once a day.
By Marco Oehrl