This is how Grayscale will avoid a future like FTX’s

Grayscale will avoid a future like FTX
  • The cryptocurrency market is going through a moment of tension and the stock markets are in the eye of the hurricane.
  • The directors in charge of Grayscale have shown greater authority in running the company compared to FTX.
  • The crypto community is remaining very skeptical of the handling of cryptocurrency exchanges.

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Grayscale, the asset manager in charge of the world’s largest Bitcoin fund, has issued a statement exposing the security of its digital asset products and confirming that it will not disclose its proof of reserves with clients.

The statement that Grayscale launched with everything that happened with FTX began in this way, “Due to recent events, it is understandable that investors are digging more into their investments in cryptocurrencies.” The question that is circulating among the community is if Grayscale will follow the same steps.

It is believed that the question-answer is it is quite unlikely. This is because the people in charge of Grayscale seem to be more capable than Sam Bankman-Fried ever was. These have demonstrated better management and greater control over their assets and those of their users.

What is also abundantly clear is that if Grayscale does not improve its balance sheet, the cryptocurrency sector will take another hit. The market is not ready for another crash, especially one so soon after FTX and involving such a crucial player. Grayscale manages more than $10 billion in Bitcoin, Ether and other assets and is the largest revenue producer for its parent company.

The parent company of Grayscale—the same one that owns trading firm Genesis, mining company Foundry, cryptocurrency investing app Luno, and news outlet CoinDesk, among others—is Digital Currency Group, whose founder and CEO Barry Silbert shared a note to DCG shareholders on November 23 addressing all the “noise” surrounding the company. He noted that despite the so-called cryptocurrency winter, the company was on track to hit $800 million in revenue and its separate entities were “business as usual.”

“We have weathered previous crypto winters and while this one may seem more severe, we will collectively come out of it stronger.”

Silbert commented on the current situation

Silbert and Grayscale management have also been in a simultaneous battle with the US Securities and Exchange Commission after regulators denied their request to make their flagship company Grayscale Bitcoin Trust the first Bitcoin exchange-traded fund in The US SEC stated that the reason for this was that:

“the investment manager had not responded to questions about concerns about market manipulation”

The company spoke out against this issue and launched a petition to reverse the decision before the Courts of Appeals of the District of Columbia, filed a lawsuit on the grounds of arbitrary, capricious and discrimination towards the SEC.