Digital Currency Group (DCG) is trying to raise funds by selling its Grayscale stake at a discount, which could cause further pain in the market,
DCG, one of the oldest players in the industry, has been in turmoil for the past few months, affected by the collapse of FTX. Its lending arm, Genesis, which filed for bankruptcy last month, owes $3 billion to various creditors.
DCG is trying to pay back Genesis creditors by selling off several of its properties. Among them is its stake in Grayscale, one of the largest digital asset managers.
DCG sells Grayscale shares to pay back creditors
The Financial Times reported that DCG is selling Grayscale stock to raise funds to bring Genesis out of bankruptcy. A US Securities and Exchange Commission (SEC) filing revealed that DCG has begun selling Grayscale stock at a discount.
Grayscale manages the Grayscale Bitcoin Trust (GBTC), which has over $14.5 billion in assets under management. But, GBTC is trending at a discount to the underlying asset, i.e. Bitcoin, due to the crypto winter.
Along with the Bitcoin Trust, DCG is also selling its stake in other trusts such as the Ethereum Trust, Litecoin Trust, Bitcoin Cash Trust, and Ethereum Classic Trust. The company sold nearly a quarter of its Ethereum Trust to raise $22 million.
DCG told the FT: “This is part of our ongoing portfolio rebalancing.” community Hope With this rebalancing “pain” in the market.
Will Genesis Rise From Bankruptcy?
Trouble for Origin escalated when Cameron Winklevoss publicly asked Origin to solve the problems for Gemini Earn users. Gemini Earn users owe $900 million to Genesis and a total of $3 billion to various other creditors.
However, Gemini and Genesis reached a $100 million settlement to resolve the issue. DCG is restructuring Genesis to help with the bankruptcy process. The creditors are expected to recover 80% of their money with this restructuring.
Origin lawyer Sean O’Neill believes the crypto lender could exit bankruptcy by the second week of May.
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BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.