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Thursday, December 28, 2023

Barry Silbert Leaves Grayscale Investments

By Mark Hunter ↗

19 hours agoWed Dec 27 2023 08:50:57

Reading Time: 2 minutes

  • Barry Silbert yesterday resigned as chairman of Grayscale Investments, just two weeks before a decision on its Bitcoin ETF
  • The DCG Chairman and CEO left the company along with DCG’s President Mark Murphy
  • DCG is involved in several legal challenges and many believe that the move reflects the pressures on Silbert and their potential distraction 

Grayscale Investments yesterday announced the resignation of chairman Barry Silbert, who is also the CEO of the parent company Digital Currency Group (DCG). The move comes amid ongoing disputes involving DCG, including regulatory lawsuits over a lending program and asset freezes at Gemini. Mark Shifke, DCG’s CFO, will succeed Silbert as chairman, while Mark Murphy, DCG’s President, has also resigned from the Grayscale board. The twin departures will be effective from January 1, with the reasons not specified, although many believe the decision is tied to Grayscale’s application for a Bitcoin ETF.

Silbert’s Legal Challenged Perceived as a Distraction?

Silbert is involved in a number of legal disputes, including with DCG subsidiary Genesis, with both the parent and child companies involved in legal entanglements with the US financial authorities. DCG and Gemini Trust are entangled in legal issues, facing a lawsuit from the New York Attorney General for allegedly failing to disclose risks associated with a crypto-lending program. 

It may be, therefore, that Grayscale is desirous of having as few complications as possible when it comes to its Bitcoin ETF application. Indeed, the development precedes a crucial January 10 deadline for the SEC to decide on various ETF applications, including Grayscale’s bid to convert the world’s largest Bitcoin trust into an ETF.

The boardroom shakeup will see Matthew Kummell and Edward McGee of DCG join the board, with Grayscale’s CEO, Michael Sonnenshein, retaining his position. Despite challenges, Grayscale expressed confidence in navigating its next phase, benefiting from the expertise of the newly appointed board members in financial services and asset management.

Grayscale Amends Bitcoin ETF Application

Amid the boardroom changes, Grayscale also amended its Bitcoin ETF application in line with a request by the Securities and Exchange Commission (SEC) that applications include a cash-only creation/redemption edict, with ETF expert James Seyffart noting that Grayscale is “bending the knee” to the SEC in acceding to its request:

Even @Grayscale ↗ is accepting the SEC’s Cash-only creation/redemption edict. Looks like they’re bending the knee. pic.twitter.com/BtbyE5XQv0 ↗

— James Seyffart (@JSeyff) December 26, 2023 ↗

A ruling on a large number of Bitcoin ETF applications is due in a forthcoming January 5-10 window, where many expect the ETF to be awarded to multiple applicants, including BlackRock and Fidelity.

Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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