Sell cryptocurrency mutual funds
Digital Currency Group (DCG), a crypto asset (virtual currency) conglomerate company, has begun to sell part of its stake in an investment trust provided by its subsidiary, the cryptocurrency management company Grayscale.
This content was reported on the 8th by the Financial Times (FT), which obtained the related documents. The purpose of the sale is believed to be to repay creditors of its bankrupt subsidiary, Genesis, a cryptocurrency lending firm.
What is DCG
A major cryptocurrency conglomerate that started investing in 2012. Subsidiaries include Grayscale and Genesis, mining company Foundry, and cryptocurrency media CoinDesk.
Among financial products offered by Grayscale, DCG has begun to sell multiple mutual funds. The following five items are listed as examples for sale.
- Ethereum Trust
- Litecoin Trust
- Bitcoin Cash Trust
- Ethereum Classic Trust
- Digital Large Cap Fund (linked to a basket of multiple stocks)
Among them, DCG has been particularly selling Ethereum (ETH) mutual funds recently. From the 24th of last month, it sold about a quarter of its stake in the Ethereum Investment Trust in multiple installments. The deal brings the company about ¥2.8 billion ($22 million) in funding.
Grayscale cryptocurrency investment trusts have been traded below the price of the underlying assets for a long time. As of this writing, the Ethereum mutual fund is trading at a discount of over 50%.
connection: Virtual currency fell sharply over the previous weekend, grayscale “GBTC” discounted about 50%
DCG sold at $8, compared to the base price of $16 per share for the Ethereum mutual fund. DCG explained that the reason for the sale was “to adjust the portfolio.”
Bankruptcy of Genesis
Genesis, whose name is cited as the reason for the sale, filed for Chapter 11 bankruptcy last month. It was affected by the default of the bankrupt Three Arrows Capital (3AC) and the bankruptcy of FTX. The bankruptcy of Genesis has also affected major cryptocurrency exchanges such as Gemini, which has partnered with the company to provide services.
connection: Virtual currency lending company Genesis filed for bankruptcy, creditors such as Gemini and Van Eck
It was reported this week that DCG and Genesis have reached an agreement with a major group of creditors. Major agreements include the debt consolidation of Genesis and the sale of the Genesis business.
connection: DCG and Genesis agree with creditor groups on debt consolidation, etc.
Genesis has 100,000 creditors and estimated liabilities of ¥130 billion ($1 billion) to ¥1.3 trillion ($10 billion). He also explained that the amount of assets he owns is about the same.