Will Grayscale be the next FTX?

On November 18, Grayscale, the asset manager that manages the world’s largest Bitcoin (BTC) fund, released a statement detailing the security of its digital asset products and confirming that it will not share proof of reserves with clients.

“Given recent events, investors are understandably asking more deeply about crypto investments,” begins with a rather understated statement following the FTX implosion and inquiry into Sam Bankman-Fried’s questionable leadership. In a short time, the question on everyone’s lips became clear. Will Greyscale be next?

The answer is that it is impossible. And that’s mostly because the people at the top, the ones who make Grayscale what it is, seem more competent than Sam Bankman-Fried.

Let’s look at the facts.

It’s true and perhaps undeniable that the crypto industry will take another dive if Grayscale doesn’t fix its balance sheet. Space simply cannot afford another crash after FTX and not of such a major player. Grayscale controls more than $10 billion in BTC, Ether (ETH) and other assets and represents its parent company’s largest revenue generator.

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Grayscale’s parent company is Digital Currency Group, the same company that owns trading firm Genesis, mining company Foundry, crypto investment app Luno and media outlet CoinDesk, founder and CEO Barry Silbert shared in a note to DCG shareholders on Nov. 23. addressing all the “noise” surrounding the company. He noted that despite the cryptocurrency winter, the company is on track to generate $800 million in revenue and that its individual entities are “business as usual.”

“We’ve weathered previous crypto winters, and while this one may seem harsher, together we’ll come out stronger,” the CEO’s note reads.

Silbert is an early Bitcoin evangelist and true cryptocurrency enthusiast. But unlike Sam Bankman-Fried, he has 28 years of experience. Before discovering cryptocurrency, he was an investment banker in New York and was the CEO of Second Market, a stock trading platform that he sold to Nasdaq in 2015. This isn’t his first rodeo, in other words.

Related: From the NY Times to the WaPo, the media hates Bankman-Fried

Silbert, along with Grayscale’s own management, is also fighting a parallel battle with the US Securities and Exchange Commission after regulators rejected his application to convert the flagship Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin exchange-traded fund (ETF), the first U.S. States. The SEC did this due to “the investment manager’s failure to respond to questions about market manipulation concerns” and poor investment protection, but you could also argue that cryptocurrencies would have had such an opportunity if they had accepted the offer. to “unlock more institutional investment” and potentially avoid the current recession we are experiencing.

Grayscale then appealed to the U.S. Court of Appeals for the District of Columbia Circuit, and the handler sued the dog over what it called “arbitrary, capricious and discriminatory.”

In other words: for anyone who cares about the future of cryptocurrency and believes in the importance of regulators acting in good faith to move the industry forward, Grayscale is fighting the good fight.

“Panic fueled by others is not a good enough reason to bypass the sophisticated security measures that have kept our investors’ assets safe for years,” Grayscale said in a Nov. 18 statement. record of consistent growth. This is unlikely to change anytime soon.

Daniele Servadei He is the co-founder and CEO of Italy-based e-commerce platform Sellix.

This article is for general information purposes and should not and should not be construed as legal or investment advice. The views, opinions and opinions expressed herein are solely those of the author and do not reflect or represent the views and opinions of Cointelegraph.

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