Barry Silbert's DCG Sells Grayscale Assets to Raise Funds

Digital Currency Group (DCG), a crypto conglomerate, is selling holdings in several investment vehicles run by its subsidiary Grayscale at a steep discount to raise capital for its bankrupt lending business.

DCG Is Selling Grayscale Assets

As reported by the Financial Times, citing the US securities filing, DCG's share sales are focused on the Ethereum fund as it has raised $22 million since January 24, selling a quarter of its stocks. Though each share of the fund claims to be $16 of Ether, DCG sells them at $8.

"This is simply part of our ongoing portfolio rebalancing," DCG told the publication.

Grayscale operates several cryptocurrency trust funds and is the prized asset of DCG, which was established in 2015 by a former banker, Barry Silbert. The crypto conglomerate is backed by SoftBank, Singapore's sovereign wealth fund GIC, and Alphabet's venture arm CapitalG, among other heavyweights.

However, DCG took a hit with the exposure of its crypto lending arm, Genesis, from two of the major collapses of the cryptocurrency industry last year. The troubles of Genesis started last year with the collapse of the Three Arrows Capital and received the final blow with the fallout of FTX last November. Additionally, the company was pressured to repay $900 million that was kept in locked deposits and received from the users of Gemini Earn.

Genesis Global Holdco LLC, the cryptocurrency lender of Genesis Global Capital's holding company, filed for Chapter 11 bankruptcy on January 20 in the United States. According to the bankruptcy documents, the company is estimated to have more than 100,000 creditors and has liabilities between $1 billion and $10 billion.

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Bankruptcy Recovery Deal

Meanwhile, Gemini's Co-Founder Cameron Winklevoss tweeted late Monday that DCG and Genesis have reached a settlement agreement with a group of creditors that was submitted as a part of the bankruptcy proceedings. It involved the sale of Genesis' crypto trading business ad lending arm.

Winklevoss highlighted that the deal would result in a payback to the Gemini Earn users.

2/ This plan is a critical step forward towards a substantial recovery of assets for all Genesis creditors.