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Grayscale rejects backup test despite ecosystem pressure



Key facts:
  • Grayscale argues that the guarantee agreement prohibits lending from the fund.

  • GBTC, Grayscale’s fund, has depreciated by 75 percent this year.


Grayscale, the company that holds the largest amount of bitcoin (BTC) reserves, second only to Satoshi Nakamoto, issued a statement assuring that it is “unaffected” by the recent events that triggered the FTX bankruptcy. However, related companies have issued warning signs that worry investors.

According to the company, Grayscale’s reserves “are reflected in historical public records” and have been evaluated by external auditors. The company, which allows investors to gain exposure to traditional financial products, with the price of bitcoin also declared that Hold bitcoin only as an underlying asset Of the investment products offered (GBTC).

These bitcoin funds are held by Coinbase Custody, a company that regularly accounts for this balance, according to Gray Scale. indicates that these funds come from 635,236 BTC. Grayscale has also been disseminated details of the sales of each of its products, due to the lack of trust generated after FTX declared bankruptcy.

Coinbase frequently performs validation on the chain. Due to security concerns, we do not make such chain wallet information or confirmation information publicly available through a cryptographic proof-of-stake or other advanced cryptographic accounting procedure.


Grayscale also states that the company’s custody agreement with Coinbase Custody prohibits such funds from being used for loans of any kind. Or otherwise encumbered.

No other entity, including DCG [Digital Currency Group], Genesis or any other Grayscale affiliate, has control over the digital assets underlying Grayscale’s products. Each of our products includes prohibitions identical to those described in the GBTC trust agreement.


A ripple effect that could have multiple consequences?

Digital Currency Group is a venture capital firm with 5 subsidiaries, including Grayscale and Genesis. The latter is the largest such loan company in the ecosystem, has blocked the disbursement of funds two days ago, after a cascade of withdrawals set off alarm reported by CryptoNews.

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Following the fall of FTX, a wave of voices On the possibility of the Digital Coin Group dissolving the trusts GBTC bitcoin and ETHE ether trusts, in order to support Genesis’ liquidity.

As reported by CryptoNews, GBTC has depreciated by 75 percent since the beginning of the year, and the fall of FTX seems to have accentuated this trend.

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