Following US Securities and Exchange Commission charges against crypto exchange Gemini and digital currency lender Genesis, Tron founder Justin Sun told the press that he could buy up to $1 billion in assets from Genesis “depending on their valuation. the situation.” In addition, crypto investment manager Osprey published an open letter to Barry Silbert of Digital Currency Group in an attempt to take over management of Grayscale’s Bitcoin Trust (GBTC).
Osprey proposes governance changes at Grayscale’s Bitcoin Trust in an open letter to the digital currency group
On January 12, 2023, the US Securities and Exchange Commission (SEC) filed charges against crypto exchange Gemini and crypto lender Genesis Global Capital. Crypto lender Genesis Global Capital is a subsidiary of Digital Currency Group (DCG). The regulator alleged that the two entities participated in an “unregistered offer”.
The SEC said that roughly three years ago, Gemini and Genesis offered investors the opportunity to lend crypto assets “in exchange for Genesis’ promise to pay interest.” The SEC’s charges followed two letters written by Gemini co-founder Cameron Winklevoss ( letter 1 , letter 2 ) and a recent shareholder letter from Silbert denying the allegations.
The next day, crypto investment manager Osprey published an open letter to Digital Currency Group (DCG) CEO Barry Silbert. Osprey wants to take over Grayscale Bitcoin Trust (GBTC) because the fund believes that “Osprey is the best third party managing GBTC right now.” DCG is Grayscale’s parent company, and Osprey isn’t the first digital currency fund to offer support; Tennessee-based crypto asset manager Valkyrie Investments is also in the running to acquire GBTC. Like Osprey, Valkyrie released an open letter to DCG saying she is “uniquely qualified” for the role.
In its letter, Osprey detailed that if it takes over GBTC, it will change several things about Bitcoin Trust. “We will reduce the management fee to 0.49% and clean up the fund’s cost structure, which contains significant conflicts of interest,” Osprey said Friday. “We will also seek to implement a repayment plan as soon as possible.” The digital currency fund manager added:
We will immediately pursue a listing on the NYSE, but from a position of cooperation with the regulatory authorities. For example, we would not participate in any litigation against the SEC, but would instead work directly with Congress to clarify to the SEC the rationale for approving the Fund as an exchange-traded ETP.
The company believes it is reaching out to its shareholders to show continued commitment. Osprey argues that DCG and Silbert should allow the fund to take over as soon as possible. “We urge you to immediately place Osprey Funds as a sponsor of GBTC, both to protect GBTC holders and to provide confidence to non-DCG stakeholders of GBTC and Grayscale who are interested in maintaining value,” Osprey said.
Tron’s Justin Sun offers to invest $1 billion in digital currency group’s assets amid SEC charges against Gemini and Genesis
Meanwhile, Trony Justin Sun told Reuters he was also willing to lend a hand. Sun said he would consider investing $1 billion in Digital Currency Group (DCG) assets, but that it depends on “situational assessment.” Sun also offered to help FTX on Nov. 11, 2022, the day before it filed for bankruptcy.
Then Sun said his team was working around the clock to help mitigate the situation with FTX and so was he noticed that he is taking steps to help FTX. However, none of the promises materialized, and the next day FTX filed for Chapter 11 bankruptcy protection and Sam Bankman-Fried stepped down as CEO.
It is unclear whether Digital Currency Group (DCG) or Genesis will accept help from organizations and individuals in the crypto industry. The company did not respond to Valkyrie’s attempt to sponsor GBTC through Grayscale during the first week of the new year.
Furthermore, Grayscale has been involved in an ongoing legal dispute with the SEC to deny the conversion of GBTC to an exchange-traded fund (ETF). Grayscale believes that if the SEC allows them to convert GBTC into an ETF, it will allow them to issue and redeem Bitcoin Trust shares. Grayscale strongly criticized the commission’s reasoning and stressed that the US regulator’s “central premise is illogical”.
What do you think of the ongoing legal disputes and potential management changes proposed by Osprey and Tron’s Justin Sun investment proposal? Do you believe this is a step in the right direction for the crypto industry or could it lead to more complications? Share your thoughts in the comments below.
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