Digital Currency Group’s Grayscale is terminating its relationship with sister firm Genesis to issue new shares of its crypto products, including the flagship fund GBTC.
Genesis will no longer be responsible for issuing new shares of its crypto fund products as Grayscale will bring the function in-house, serving as an authorized participant for the products via a new entity, Grayscale Securities, according to a new regulatory filing with the Securities and Exchange Commission.
CoinDesk, which DCG also owns, first reported the news.
Grayscale Securities, a registered broker-dealer with the SEC and FINRA member, will serve as the only authorized participant. Genesis will continue to serve as a liquidity provider, sourcing cryptocurrency holdings for the trusts.
The transition — which is effective October 3 — comes amid a flurry of exits from Genesis in the wake of the meltdown of crypto hedge fund Three Arrows Capital, against which Genesis filed a $1.3 billion claim.
Several Genesis executives have left the firm in recent months, including former CEO Michael Moro, sales and trading executive Matt Ballensweig, and head of derivatives Joshua Lim.
The broker said in August that it cut 20% of its workforce.
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Frank Chaparro covers the intersection of financial markets and cryptocurrency as Editor-at-Large. Since joining the publication in 2018 as its first reporter, he has played a key role in building The Block into a leader in financial journalism and research.
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Source: https://www.theblock.co/post/174448/genesis-is-no-longer-acting-as-an-authorized-participant-for-grayscales-crypto-trust-products?utm_source=rss&utm_medium=rss