Will Grayscale be the next FTX?

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

“Due to recent events, investors are understandably questioning their crypto investments more deeply,” the statement begins, which is quite an understatement after the implosion of FTX and the investigation into Sam’s questionable leadership. Bankman-Fried. In no time, the question on everyone’s lips became clear. Will Grayscale be next?

The answer is that it is unlikely. And that’s largely because the people at the top, the people who made Grayscale what it is, seem to be more knowledgeable than Sam Bankman-Fried ever was.

Let’s look at the facts.

It is true and perhaps undeniable that the crypto industry will take another plunge if Grayscale does not fix its balance sheet. The space simply cannot afford another crash, not so soon after FTX and not that of such a key player. Grayscale oversees over $10 billion in BTC, Ether (ETH) and other assets and is its parent company’s largest revenue generator.

Related: It’s time for crypto fans to stop supporting personality cults

Grayscale’s parent company — the same one that owns trading firm Genesis, mining firm Foundry, crypto investment app Luno, and media outlet CoinDesk, among others — is Digital Currency Group, whose founder and CEO Barry Silbert shared. a note to DCG shareholders on November 23. tackle all the “noise” that surrounds the company. He reported that despite the so-called crypto winter, the company was on track to hit $800 million in revenue and its separate entities were “operating as usual.”

“We have weathered previous crypto winters,” the CEO note reads, “and while this one may seem harsher, collectively, we will come out of it stronger.”

Silbert is an early Bitcoin evangelist and a true cryptocurrency enthusiast. But, unlike Sam Bankman-Fried, he has 28 years of experience under his belt. Before discovering crypto, he was an investment banker in New York and was the CEO of stock trading platform Second Market, which he sold to Nasdaq in 2015. It’s not, in other terms, his first rodeo.

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

Silbert, along with Grayscale’s own executives, also fought a parallel fight with the U.S. Securities and Exchange Commission after regulators rejected his request to turn his flagship product Grayscale Bitcoin Trust (GBTC) into an online-traded fund. exchange (ETF) Bitcoin, the first in the United States. The SEC did so on the grounds of “the investment manager’s inability to respond to questions regarding concerns about market manipulation” and poor investment protection, but you might as well argue that if they had accepted the offer, cryptocurrencies would have had the opportunity to “open up to more institutional investment” and potentially avoid the current downturn we are experiencing.

Grayscale then filed a motion challenging the decision with the United States Court of Appeals for the District of Columbia and sued the watchdog for what it called an “arbitrary, capricious, and discriminatory” decision.

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

“Panic unleashed by others is not reason enough to circumvent the complex security arrangements that have protected our investors’ assets for years,” Grayscale’s Nov. 18 statement noted. They have proven their worth and backed up their reputation with a decade-long track record. steady growth record. This is unlikely to change anytime soon.

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

This article is for general informational purposes and is not intended to be and should not be considered legal or investment advice. The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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