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Peter Schiff Sends Stern Warning to Barry Silbert Over Grayscale Bitcoin Trust Price Collapse

Peter Schiff is not happy with Grayscale investments’ national ad campaign that aims to push for more awareness of cryptocurrencies and to promote the mainstream adoption of Bitcoin and Ethereum.

Grayscale’s parent company CEO, Barry Silbert, announced the TV ad campaign on Aug. 7, 2020.

Peter tweeted that despite a massive TV ad campaign to pump the price, the Grayscale Ethereum Trust just experienced its lowest price drop since March and has fallen over 80% since its June high.

Institutional Investors Dump Shares

Peter Schiff has faulted Grayscale Investments crypto asset management company for failing to push the shares of its Ethereum Trust with its massive national TV ad campaign. Schiff thinks that Grayscale Ethereum Trust’s poor performance is like a major indicator for the more popular Grayscale’s Bitcoin Trust that was also featured in the same campaign.

Similar to what Schiff has said, Grayscale Ethereum Trust (the trust named, ETHE) took a significant beating over the past few months, falling over 80% from its June high when investors were willing to pay more than 1,000% premium to buy Ether.

The rapid decline began when a huge amount of ETHE shares became available for trading on the secondary OTC markets after the expiration of a year-long lockup period. On Tuesday, 8th September, ETHE share price sits around $49.2, the lowest level since the March crypto crash.

With the ETHE premium goes down, Schiff insists that it is a sign of “waning demand.”

Millennials Prefer Bitcoin, Older Investors Go for Gold

Peter Schiff, the well-known gold investor and the Euro Pacific Capital CEO, has been known for a long-time criticizing Bitcoin, claiming that it is not a good investment and calling it a pyramid scheme.

His son, Spencer Schiff, recently began investing in Bitcoin. But Schiff complained about his son buying more Bitcoin against his advice. Schiff began a poll asking his followers on Twitter if they want to follow his advice or his son’s. The poll showed that the majority of the Twitter community appeared backing his son.

Schiff continued his anti-Bitcoin narrative, stating that his “concern is for older (investors) who will lose a lot more, and who don’t have enough years left to make back what the loss.”

The poll came a few weeks after Schiff had asked the Twitter crypto community to send his son some Bitcoin for his 18th birthday.

According to JPMorgan Chase research, older investors tend to favor gold and bond funds, while millennials lean towards crypto and tech-related investments. Older generation investors appear to align more with gold, traditionally viewed as a safe-haven asset. On the other hand, millennials embrace crypto and tech-related investments more, despite volatility and other risks associated with cryptocurrency.

Bitcoin Price Bull Run Sees Grayscale Investments add $300M AUM in One Day

Grayscale Investments is sure to cause Bitcoin FOMO among institutions still afraid to venture into BTC, as CEO Barry Silbert announced a breathtaking increase of $300 million in AUM after a single day this week.

Grayscale Investment has seen its assets under management (AUM) grow by $1 billion in the space of a week, with $300 million added in a single day—thanks to Bitcoin’s (BTC) price break out bull run to $13,000.

According to a Twitter post by Grayscale CEO Barry Silbert today, the investment firm now has $7.3 billion in assets under management (AUM)—a one billion dollar increase since it last reported $6.3 Billion in AUM on Oct.15.

Silbert tweeted:

“Added a cool $300 million in AUM in one day”

Grayscale’s funds are predominantly held in trusts for Bitcoin (BTC) and Ethereum (ETH). The recent surge in the BTC price is and crypto markets are most likely the result of US monetary and stimulus policy and payments giant PayPal’s recent crypto market entry.

In the post, the Grayscale CEO reported that the investment firm’s Litecoin (LTC) Trust had increased the most by more than 7.5%. Its Zcash (ZEC) Trust increased by more than 6% in the same timeframe. The institutional-grade investment firm also has relatively small allocations of Ethereum Classic (ETC), Horizen (ZEN), Stellar Lumens (XLM), XRP, and Bitcoin Cash (BCH).

Grayscale is one of the first major public companies to recognize crypto’s potential and has recently been joined by Galaxy Digital, Microstrategy, and Square, as businesses react to a change in sentiment towards Bitcoin and other cryptocurrencies.

Coindesk May Be Sold as Parent Company DCG Struggles

According to recent reports, the cryptocurrency news website CoinDesk is mulling over the possibility of being sold as its parent company, Digital Currency Group (DCG), wants to improve its financial standing.

The Wall Street Journal reports that CoinDesk has enlisted the assistance of investment bankers from the financial advising firm Lazard. These investment bankers are assisting the company in weighing its alternatives, which may include a whole or partial sale.

You know, I recently became aware that Coindesk is now available for purchase.

Charles Hoskinson, who tweets under the handle @IOHK Charles 19th of January, 2023 In the past few months, it has been reported that DCG has received multiple offers for the media company that are higher than $200 million. If these reports are accurate, this would represent an incredible return on investment for DCG given that the company was reportedly purchased by DCG for only $500,000 in 2016.

It would seem that Barry Silbert’s DCG is experiencing significant financial difficulties as of late. On January 17, the company informed its shareholders that it will be suspending dividend payments in an attempt to improve the soundness of its balance sheet and “preserve liquidity.”

On January 18, Bloomberg reported that another DCG subsidiary, crypto lending business Genesis Global, was intending to file for bankruptcy after it revealed that it owed creditors over $3 billion. This is undoubtedly the primary cause contributing to DCG’s current financial predicament.

According to the company’s website, DCG’s venture capital portfolio includes about 200 crypto-related startups, some of which include CoinDesk and Genesis.

The asset management company Grayscale Investments, the cryptocurrency exchange Luno, and the advising firm Foundry are all other businesses that are owned by DCG.

Some people believe that the article published by CoinDesk in November that revealed the irregularities in Alameda Research’s balance sheet was the first domino that eventually led to the collapse of the cryptocurrency exchange FTX as well as the liquidity issues that Genesis, its parent company DCG, and the broader cryptocurrency market are currently facing.

DCG's subsidiary Genesis Capital slapped with new class

A new class action lawsuit has been filed against the cryptocurrency corporation Digital Currency Group (DCG), making the company’s legal woes even more numerous. The claim was filed against DCG’s subsidiary Genesis Capital.

In a securities class action (SCA) lawsuit against DCG and its founder and CEO Barry Silbert, creditors of Genesis allege that the defendants violated laws governing the sale and purchase of securities in the United States.

On behalf of people and companies who engaged into digital asset loan arrangements with Genesis, the legal firm Silver Golub & Teitell (SGT) of Connecticut filed the action. The plaintiffs in the case are seeking compensation for their losses.

The legal company is well-known in the sector for managing important litigation, such as the class action complaint that was brought against Coinbase in March 2022.

In the new complaint filed against DCG and Silbert, it is alleged that Genesis engaged in an unregistered securities offering in violation of securities laws. Specifically, it is alleged that Genesis violated securities laws by executing lending agreements involving securities without first meeting the requirements for an exemption from registration under federal securities laws.

The complaint also claims that Genesis engaged in securities fraud by devising a plan to deceive new and current digital asset lenders by providing false and misleading representations. This is said to have occurred as part of a strategy to steal money.

Plaintiffs allege that Genesis knowingly misrepresented the company’s current financial situation, which constitutes a violation of section 10(b) of the Securities Exchange Act of the United States. ” The scheme to defraud was carried out, according to the complaint, in order to induce prospective digital asset lenders to loan digital assets to Genesis Global Capital and to prevent existing lenders from redeeming their digital assets,” SGT lawyers noted. ” The goal of the scheme was to induce prospective digital asset lenders to loan digital assets to Genesis Global Capital.”

DCG is a cryptocurrency company based in Connecticut that was established in 2015. It functions as the parent company of several digital asset and blockchain-focused subsidiaries, some of which include Genesis, a digital asset manager called Grayscale Investments, a cryptocurrency mining company called Foundry, and a cryptocurrency media outlet called Coindesk.

Silbert, the current CEO of DCG, has a controlling ownership share in the company equal to forty percent and also serves as the chairman of the board of directors for DCG.

The announcement was made as Genesis was in the midst of its first bankruptcy proceedings on January 23, after the company’s first bankruptcy filing on January 19.

The bankruptcy petition was filed a few months after Genesis temporarily ceased withdrawals on November 16 due to the fact that the company had been unable to execute redemption requests in light of the bear market in cryptocurrencies.

It has been revealed that Genesis owes $900 million to the customers of the cryptocurrency trading platform Gemini, which was established by the Winklevoss brothers. Gemini is one of the most significant debtors of Genesis.

Cameron Winklevoss, one of the co-founders of Gemini, went to Twitter on January 20 to announce that the company was ready to take direct legal action against DCG, Silbert, and “those who share culpability for the scam.”

Digital Currency Group Sells Shares in Subsidiary's Crypto Funds

The cryptocurrency conglomerate known as Digital Currency Group (DCG) is apparently getting ready to generate cash and maintain its liquidity by selling its assets in cryptocurrency funds that are managed by a subsidiary of the company known as Grayscale Investments.

According to a report that was published on February 7 by the Financial Times, which cited United States securities filings, DCG sold approximately one quarter of its shares in Grayscale’s Ether (ETH)-based fund for approximately $8 per share, despite the fact that each share held a claim to nearly double that amount in ETH. The filings were cited in the report.

In addition to this, it is said to have sold down small share parcels in Grayscale’s Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum Classic (ETC)-based trusts. This is in addition to its Digital Large Cap Fund, which is a single fund that invests in Bitcoin (BTC), Ether, Polygon (MATIC), Solana (SOL), and Cardano (ADA).

The response that DCG gave when queried about the share sales was that “it is just part of our regular portfolio rebalancing.”

In spite of this declaration, there are others who feel that Barry Silbert’s DCG might be heading for some kind of financial difficulty.

Another of its companies, the cryptocurrency lending business Genesis Global Capital, filed a bankruptcy petition on January 19 and is reported to owe its creditors more than $3 billion.

Companies controlled by DCG have been significantly impacted by the contagion that has resulted from FTX’s downfall. Over the last several weeks, these companies have been forced to let go of over 500 people.

However, DCG has taken a number of actions to maintain liquidity in 2023, such as informing its shareholders in a letter dated January 17 that it would be discontinuing its quarterly dividend payments as it seeks to improve its balance sheets. This was one of the many initiatives that DCG has done.

After stating that it had received offers for the cryptocurrency media outlet CoinDesk that were greater than $200 million, DCG has reportedly sought the assistance of the financial advisory firm Lazard in order to assist it in weighing up options to sell CoinDesk, which is another of its subsidiaries.

According to the company’s website, DCG’s venture capital portfolio includes about 200 crypto-related startups, some of which include Grayscale, Genesis, and CoinDesk. Additionally, DCG has interest in a number of other businesses, such as the cryptocurrency exchange Luno and the advising company Foundry.

Barry Silbert Resigns from Grayscale Investments Board Amidst Industry Challenges

Grayscale Investments, a leading cryptocurrency trust manager, has announced the resignation of Barry Silbert from its board of directors. Silbert, recognized as the founder and CEO of Digital Currency Group (DCG), the parent company of Grayscale, officially stepped down as of January 1, 2024. This move comes amidst a challenging period for the crypto industry, particularly following the 2022 market downturn.

Grayscale Investments has been at the forefront of advocating for the conversion of the world’s largest Bitcoin trust into an exchange-traded fund (ETF). The company’s ambition to gain U.S. approval for this conversion adds a significant backdrop to the board changes. Moreover, the resignation of Mark Murphy, the President of DCG, from the Grayscale board adds to the reshuffling of the firm’s leadership. Silbert’s departure is succeeded by Mark Shifke, DCG’s Chief Financial Officer, indicating a strategic realignment within the organization.

The timing of these resignations is crucial, given the looming SEC decision on a spot Bitcoin ETF application filed by ARK Investment Management LLC and 21Shares, scheduled for January 10. Grayscale’s application for a GBTC conversion is also under the regulator’s consideration. This scenario underscores the pivotal role Grayscale plays in the broader context of cryptocurrency investment and regulation.

The departures occur amid legal battles involving DCG. The conglomerate faces lawsuits from U.S. regulators over a lending program by its former unit, Genesis Global Capital, and Gemini Trust Co. These legal issues have cast a shadow over the firm, with Silbert personally named in a lawsuit filed by New York Attorney General Letitia James concerning the disclosure of risks in a crypto-lending program.

Grayscale has responded to these challenges by expanding its board. Matthew Kummell, Senior Vice President of Operations at DCG, and Edward McGee, CFO of Grayscale, have joined the board. Grayscale CEO Michael Sonnenshein remains a board member. This expansion is indicative of Grayscale’s commitment to navigating the evolving landscape of cryptocurrency investments and regulations.

Grayscale's Strategic Shift: Aiming for Bitcoin Spot ETF with Cash Redemption Model

Grayscale Investments has amended its S-3 filing with the U.S. Securities and Exchange Commission (SEC). This move is aimed at transitioning the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin Exchange-Traded Fund (ETF). Notably, the amendment follows the resignation of Barry Silbert as the chairman of Grayscale, marking a new chapter in the company’s direction.

Regulatory Compliance and Strategic Positioning

Grayscale’s amendment reflects a compliance with the SEC’s guidelines, notably pivoting to accept only cash orders. This decision is not just a mere compliance tactic; it signifies a strategic shift. Grayscale is positioning itself to compete with significant players like BlackRock in the ETF market. This move is especially crucial as Grayscale prepares for a significant approval deadline in January. The company is adapting its structure, transitioning from a monthly to a daily fee structure and simplifying the share creation and redemption process, indicating readiness to make a substantial impact in the ETF arena.

The Cash Creation Model

A critical aspect of Grayscale’s amended S-3 filing is the adoption of a cash creation model. This model means that new shares in a spot Bitcoin ETF can only be created or redeemed through cash transactions, contrasting with the in-kind model used by most stock and commodity-based ETFs, where fund market participants directly handle the asset in the fund. The shift to a cash creation model has been a significant point of contention between asset managers aiming to launch a spot Bitcoin ETF and the SEC. This move is seen as Grayscale “finally surrendering” to the cash creation model, a significant deviation from its previous stance.

The SEC’s preference for the cash creation model over direct dealings with Bitcoin is understood as an attempt to better monitor Bitcoin movements from exchanges and mitigate risks related to anti-money laundering or Know Your Customer compliance. This preference underlines the regulatory challenges faced by digital asset managers in navigating the complex landscape of financial regulations. The shift to a cash redemption model is expected to have profound implications on the cryptocurrency market, potentially challenging the profitable model of crypto exchanges and altering the financial landscape. Grayscale’s move could set a precedent for other digital asset managers in navigating regulatory challenges.

DCG Completes Payment of Short-Term Debts to Dissolved Crypto Lender Genesis

DCG Resolves Debts Amid Turbulence in the Crypto Sector

The Digital Currency Group (DCG), a key player in the cryptocurrency sector, has accomplished a big milestone by paying off all of its short-term loans to Genesis, a bitcoin lending platform that has since been dissolved. In the continuous tale of bitcoin business issues and attempts to restructure, this signals a significant milestone that is of critical importance.

The Beginning of the Process of Dissolution, Beginning with Suspension

During the month of November 2022, Genesis, which had previously been a prominent bitcoin lending platform, had a significant setback when it ceased withdrawals. The turbulent circumstances in the cryptocurrency market were the driving force behind this decision, which ultimately resulted in Genesis declaring for bankruptcy in January of 2023. In the months leading up to its bankruptcy, Genesis was struggling under the weight of significant debts, with its top fifty creditors owing more than $3.5 billion alone.

Strategy for Commitment and Repayment Employed by DCG

A promise was made by DCG in November 2023 to settle all outstanding commitments to Genesis by April 2024. This pledge was made in the midst of very difficult circumstances. Barry Silbert, the Chief Executive Officer of DCG, said that the company was able to successfully fulfill these loan commitments despite the challenging environment that prevailed in the cryptocurrency market for the whole year of 2023.

Recent confirmations from DCG have shown that Genesis has received funds in the amount of around 700 million dollars. The greater sum of more than one billion dollars that was delivered to creditors throughout the course of the previous year includes this amount as a component. DCG’s efforts to stabilize its business and stick to its promises in a market that is volatile are shown by this hefty payment.

Repercussions and Prospects for the Future

The continuing reorganization and realignment that is taking place inside the cryptocurrency industry is brought to light by the breakup of Genesis and the repayment by DCG for their debt. The problems that bitcoin firms have in managing market swings and ensuring financial stability are brought into sharper focus by these occurrences. In addition, the successful settlement reached by DCG may serve as a model for other organizations who find themselves in a scenario like to their own, providing a look into possible recovery paths in the unpredictable cryptocurrency market.