​​Genesis May Be Facing Bankruptcy. Could It Take DCG Down With It? - Ep. 429

Ram Ahluwalia, CEO and co-founder of crypto-native investment advisor Lumida, and Samuel Andrew, crypto author and analyst, talk about the financial situation at Genesis and parent company Digital Currency Group (DCG). The collapse of FTX has dealt crypto lender Genesis another major blow, with the firm halting withdrawals and DCG stepping in to help. Now the two face a range of suboptimal outcomes in the face of massive debts. Ahluwalia and Andrew discuss what could come next, and what should be learned from the recent debacles.
Show highlights:

why Genesis and DCG are so important for the crypto sector

Ram's explanation of the "Grayscale trade" and why it is relevant to understand the current crisis

the ghost of Three Arrows Capital and the origins of Genesis' problems

why Sam thinks Genesis was "reckless" in its loan underwriting

what a spot Bitcoin ETF would mean for Grayscale's revenue

what options Genesis and DCG have to weather the storm

whether it makes sense for Genesis to file for bankruptcy

why Ram thinks Genesis lending product needs to be be shut down

why Gemini and its Earn program loom large in the Genesis situation

the risks of enforcement action from regulators

what the most likely outcome is for Genesis and DCG and whether creditors will be made whole

whether there will be broader contagion stemming from Genesis and what other crypto companies could be in trouble

the problems of leverage and why crypto's "shadow banks" need regulation

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Ram:

Twitter

Ram’s thread on GBTC

Previous Unchained episodes:

Why Genesis Could Very Well Be Insolvent, Not Just Illiquid

Sam:

Twitter

Substack

Episode Links

Genesis:

Unchained:

Genesis Warns of Bankruptcy If Funding Plans Fail: Report

On-chain Analysts ID 432 GBTC Addresses After Grayscale Says No to Proof-of-Reserves

WSJ: Crypto Lender Genesis Asks Binance and Apollo for Cash

Decrypt: Digital Currency Group Says No Imminent Threat Despite Owing Genesis $575M

The Block: DCG CEO Barry Silbert updates shareholders, says company will emerge 'stronger'

Previous coverage of Unchained on Genesis:

‘The Last Big Whale’: Why the Crypto Contagion of 2022 Eventually Hit Genesis

Adam Cochran on Why Crypto Prices Will Be Down Bad for the Next Six Months

Is the Collapse of Crypto Lending Over, or Is It Just Starting?

The Chopping Block: SBF Wants to Win in the Court of Public Opinion. Will He?

FT: Crypto broker Genesis owes Winklevoss exchange’s customers $900mn

WSJ: Rising Tether Loans Add Risk to Stablecoin, Crypto World
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