‘Next FTX’ Could Be This Cryptocurrency Company: They’re Selling!

‘Next FTX’ Could Be This Cryptocurrency Company: They’re Selling!

'Next FTX' Could Be This Cryptocurrency Company: They're Selling!

Will Clemente, co-founder of cryptocurrency analytics firm Reflexivity Research, tweeted on Dec. In the tweet, he revealed that cryptos related to Digital Currency Group (DCG) have seen massive sales in the last 24 hours. In the middle of cryptocurrencies are Filecoin, Flow, Stacks, Livepeer, Ethereum Classic, Decentraland and others. So, are Genesis and Grayscale within DCG worried?

Is the risk too great for DCG and Grayscale?

ArchPublic co-founder Andrew Parish shared that the Genesis creditor has started selling in small lots. He reported that the two processes, worth $15 million, closed at 35 percent of the cost of the pre-withdrawal suspension. Commenting on the data shared by Andrew Parish, Adam Cochran noted that if this is true, it could be the early stage of DCG bankruptcy.

Genesis and Alameda had lousy loans and intertwined crypto lender-borrower relationships. The bankruptcy of FTX and Alameda could risk the liquidation of Genesis. This could lead to the bankruptcy of its parent company, Digital Currency Group (DCG). DCG’s $1.1 billion promissory note to Genesis could cause the main cluster to terminate Grayscale’s GBTC and EETH. This indeed risks bankruptcy for Grayscale. According to the data of Coinglass, GBTC is trading with a discount premium rate of -48.79% and EETH with a discount premium rate of -52.58%. In fact, Grayscale’s Ethereum Classic fund ETHC is trading at a discount of over -70%.

'Next FTX' Could Be This Cryptocurrency Company: They're Selling!

Prices fell in the market

Currently, Bitcoin price is trading at $16,729, down over 4% in the last 24 hours. Ethereum price is down 8% and the current price is trading at $1,181. Cryptocurrencies related to Barry Silbert’s DCG such as Filecoin, Mask, Flow and Ethereum Classic fell 26, 16, 16 and 12 percent, respectively. Genesis’s lending platform, Genesis Capital, is seen by many experts as already bankrupt. Neither Barry Silbert nor DCG and Genesis made any statements to quell the panic.

Bitvavo Custody BV, a module of Dutch cryptocurrency exchange Bitvavo, revealed in a blog that it encountered problems accessing the $290 million allocated to DCG. He said DCG and its affiliates are currently experiencing liquidity crunch. He said they are suspending refunds until further notice. In other words, in addition to DCG, subsidiaries and companies that have sent funds to the institution are also in distress.

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