Nov 22, 2022 - Economy

Crypto boss Barry Silbert breaks silence amid feverish speculation

Illustration of a person in a suit holding an umbrella made of money

Illustration: Sarah Grillo/Axios

Veteran crypto boss Barry Silbert, chief and founder of Digital Currency Group, in a letter to shareholders Tuesday tried to shore up confidence in the crypto conglomerate as speculation around the health of its subsidiary Genesis reached fever pitch.

Why it matters: When Silbert talks, the crypto industry tends to listen. That he would speak out in defense of his business and its main subsidiaries suggests that the FTX-catalyzed contagion has had an impact.

Driving the news: "Taking a step back, let me be crystal clear," Silbert said in a letter seen by Axios.

  • "DCG will continue to be a leading builder of the industry and we are committed to our long-term mission of accelerating the development of a better financial system."

Context: Concerns about the health of the DCG enterprise started when its lending subsidary, Genesis, halted redemptions and new loan originations.

What he's saying: Silbert led with Genesis' situation, but stopped short of providing any more information about it. Rather, he emphasized DCG's health and made clear its Genesis-related and unrelated liabilities.

  • "DCG currently has a liability to Genesis Global Capital of ~$575 million, which is due in May 2023. These loans were used to fund investment opportunities and to repurchase DCG stock from non-employee shareholders," he said.
  • "Aside from the Genesis Global Capital intercompany loans due in May 2023 and the long-term promissory note, DCG’s only debt is a $350M credit facility from a small group of lenders led by Eldridge."

What others are saying: "It seems Genesis has 'days, not weeks' to reach a creditor agreement in order to avoid Chapter 11," founder and chief of Messari Ryan Selkis tweeted Monday, adding that he is optimistic about DCG.

The intrigue: The day seemed a brighter one for another DCG company, Grayscale. Grayscale Investments Bitcoin Trust's, or "GBTC," market-defying jump on Tuesday pushed the price of the world's largest bitcoin fund closer to its net asset value.

  • Shares were up 3% near the closing bell Tuesday, outperforming bitcoin.
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