{"id":71303,"date":"2022-12-12T10:55:45","date_gmt":"2022-12-12T08:55:45","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=71303"},"modified":"2025-09-08T07:53:34","modified_gmt":"2025-09-08T04:53:34","slug":"messari-founder-flags-difficulties-in-saving-dcg","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/messari-founder-flags-difficulties-in-saving-dcg\/","title":{"rendered":"Messari founder flags difficulties in &#8216;saving&#8217; DCG"},"content":{"rendered":"<p>The decisive factor for Genesis Global Capital in settling its debt with the parent <span data-descr=\\\"Digital Currency Group\\\" class=\\\"old_tooltip\\\">DCG<\/span> is the exact withdrawal dates from Alameda Research&#8217;s troubled OTC platform. This was stated by Messari founder and CEO Ryan Selkis.<\/p>\n<p>\\n\\n<\/p>\n<blockquote class=\\\"twitter-tweet\\\">\n<p lang=\\\"en\\\" dir=\\\"ltr\\\">1\/ The final DCG-Genesis question has to do with potentially catastrophic bad luck. In Q2 and Q3, Genesis unwound over $10 billion of its loan book.<\/p>\n<p>Given Alameda and Genesis were the two biggest crypto borrower-lender counterparties in the world, it\u2019s likely they had loans.<\/p>\n<p>\u2014 Ryan Selkis \ud83e\udd77 (@twobitidiot) <a href=\\\"https:\/\/twitter.com\/twobitidiot\/status\/1601976247537614848?ref_src=twsrc%5Etfw\\\">December 11, 2022<\/a><\/p><\/blockquote>\n<p> <script async=\\\"\\\" src=\\\"https:\/\/platform.twitter.com\/widgets.js\\\" charset=\\\"utf-8\\\"><\/script>\\n\\n<\/p>\n<p>The expert noted that in Q2 and Q3 Genesis Global Capital dutifully closed $10 billion of loans, and this could have amounted to \\&#8221;catastrophic bad luck.\\&#8221;<\/p>\n<p>\\n\\n<\/p>\n<p>On the crypto market, Alameda and Genesis were the largest market makers, and it is unlikely they did not act as counterparties to each other, Selkis suggested.<\/p>\n<p>\\n\\n<\/p>\n<p>In his view, by the moment of the <a href=\"https:\/\/forklog.com\/en\/news\/ftx-group-files-for-bankruptcy-sam-bankman-fried-resigns-as-ceo\">collapse of FTX<\/a>, the positions between them had been closed. On the one hand, this suggests good risk management; on the other, it raises questions about the timing of the trades.<\/p>\n<p>\\n\\n<\/p>\n<p>The expert explained that in bankruptcy cases there is a <a href=\\\"https:\/\/en.wikipedia.org\/wiki\/Clawback\\\">90-day clawback period<\/a>.<\/p>\n<p>\\n\\n<\/p>\n<p>With the FTX\/Alameda filing on November 11, this clause has been in effect since August 13. In other words, Genesis could have invoked it if the latest dealings with Sam Bankman-Fried&#8217;s trading firm were recorded after that date. The reverse is also true.<\/p>\n<p>\\n\\n<\/p>\n<p>As a result, Selkis asked the following questions:<\/p>\n<p>\\n\\n<\/p>\n<ul class=\\\"wp-block-list\\\">\n<li>Did Genesis borrow funds from Alameda?<\/li>\n<li>If so, how many transactions occurred after that reporting date?<\/li>\n<li>Will these trades be subject to a clawback provision?<\/li>\n<\/ul>\n<p>\\n\\n<\/p>\n<p>The founder of Messari did not rule out that, between August 13 and November 11, counterparties conducted a large number of trades with each other. This could pose a hurdle for a potential investor in DCG, who would not want to take on such a risk.<\/p>\n<p>\\n\\n<\/p>\n<p>The complication is that any clarification may come only after the years-long, incredibly complex bankruptcy process of FTX, which could leave Genesis with a \\&#8221;long-term liability\\&#8221; on its balance sheet.<\/p>\n<p>\\n\\n<\/p>\n<p>In summary, according to Selkis, the following questions remain unresolved, which effectively will determine the scope of contagion in the cryptocurrency market:<\/p>\n<p>\\n\\n<\/p>\n<ul class=\\\"wp-block-list\\\">\n<li>What is the fate of GBTC;<\/li>\n<li>Does DCG hold a promissory note to Genesis for $1.1 billion with a prepayment option;<\/li>\n<li>Did the OTC platform provide loans to Alameda Research between August 13 and November 11.<\/li>\n<\/ul>\n<p>\\n\\n<\/p>\n<p>Regarding the latter, Selkis pointed to the low chances of Genesis recovering funds under the clawback clause.<\/p>\n<p>\\n\\n<\/p>\n<p>The expert expects a \\&#8221;major legal battle\\&#8221; that will complicate assessing the potential range of impacts on the size of the liabilities.<\/p>\n<p>\\n\\n<\/p>\n<p>Earlier, Selkis described the best-case scenario for Digital Currency Group to exit the crisis.<\/p>\n<p>\\n\\n<\/p>\n<p>Earlier, Bernstein had contemplated the <a href=\"https:\/\/forklog.com\/en\/news\/bernstein-analysts-flag-possible-liquidation-of-the-grayscale-bitcoin-trust\">liquidation of the Grayscale Bitcoin Trust<\/a> as a solution to the \\&#8221;problematic\\&#8221; DCG.<\/p>\n<p>\\n\\n<\/p>\n<p>Follow ForkLog&#8217;s bitcoin news on our <a href=\\\"\/\/telegram.me\/forklog\u201d\\\" target=\\\"\u201c_blank\u201d\\\" rel=\\\"\u201cnofollow\u201d noopener\\\">Telegram<\/a> \u2014 cryptocurrency news, prices and analysis.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The decisive factor for Genesis Trading in settling its debt with its parent DCG is the precise withdrawal dates from Alameda Research&#8217;s troubled OTC platform. This was stated by Messari founder and CEO Ryan Selkis.<\/p>\n","protected":false},"author":1,"featured_media":71304,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1435,184,1380,1468],"class_list":["post-71303","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-alameda-research","tag-dcg","tag-genesis-global-capital","tag-messari"],"aioseo_notices":[],"amp_enabled":true,"views":"10","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/71303","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=71303"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/71303\/revisions"}],"predecessor-version":[{"id":71305,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/71303\/revisions\/71305"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/71304"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=71303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=71303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=71303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}