Original source: BitpushNews
Original source: BitpushNews
If the bear market is compared to a battle to defend industry confidence, then the collapse of luna and Three Arrows can be regarded as a Waterloo. Investors can only pray secretly whether the even more tragic FTX bankruptcy is the last line of defense to be breached.
Before the incident, almost all investors could not believe that this exchange, once ranked second in the world with a valuation of tens of billions of dollars, would collapse within a few days. On November 12, the day FTX declared bankruptcy, Bitcoin fell by more than 5%.
Subsequently, 130 FTX-affiliated entities also went bankrupt, among which Genesis, Grayscale and DCG were deeply involved in rumors of thunderstorms because of their close financial ties to the former. Recently, DCG has also been deeply involved in thunderstorm rumors, and the entire market is panicked. With the arrest of FTX, the ending of DCG founder Barry Silbert has aroused the imagination of the outside world. What kind of person is Barry Silbert? Why can he control such a huge encryption empire? What is his end? Bitui will reveal the secret to you below.
1. Once an ill-fated entrepreneur in the financial circle, he started to hang up after encountering Crypto
Before he came into contact with Crypto, Barry Silbert had been working in the financial industry. He might be obsessed with the label of financial entrepreneur because he was restless, but he seemed to be out of luck.
Barry Silbert was born in 1976 and grew up in Gaithersburg, Maryland. He got his stockbroker's license at 17, moved to Atlanta after high school, and studied at Emory University's Goizueta School of Business.
In 1998, Silbert, who graduated from college, joined Houlihan Lokey, an investment bank in New York, and worked until 2004. A high starting point and a large platform make Silbert ambitious. Of course, this also allows him to accumulate experience and contacts. After resigning, Silbert started a business in the financial market.
SecondMarket is Silbert's representative work in the traditional financial circle. It is a private equity trading platform dedicated to matching stocks of unlisted companies. It was established in 2005. This kind of platform has obvious non-standardized attributes, and there are also a lot of uncertainties in business stability and profitability. Palihapitiya, a Facebook executive and a key investor in SecondMarket, once concluded helplessly: This kind of business is difficult to predict. One day we will buy and sell a large amount of Facebook and Twitter stocks, and then there may be no business opening for two or three weeks.
A few years after SecondMarket was founded, the financial crisis of 2008 hit the business hard. But this also allowed Silbert to find a new turning point in desperation.
2. Silber quickly climbed to the pinnacle of his life after becoming attached to cryptocurrency.
In 2011, Silbert read a chapter on the "Darknet" Silk Road in a book, which detailed the details of a group of fringe tech geeks using Bitcoin to complete black market transactions. This made him suddenly realize: It is still futile to fight in the financial market for many years, but why not change your thinking and publicity, and find another way to choose encrypted finance under the decentralized and peer-to-peer trading model? Subsequently, the concept of digital gold was planted in Silbert's heart. He felt that banks could no longer ignore Bitcoin, and closely bound his personal entrepreneurship + investment path with Crypto.
In 2012, when Bitcoin rose to $10, Silbert made a full investment of $1.75 billion, sold it at $50, and made a profit of 2.5 times. Silbert tasted the sweetness of this new thing for the first time, and got the first pot of gold smoothly. The following year, Silbert successfully persuaded SecondMarket's board of directors to take $3 million from the company to invest in Bitcoin, and formed a crypto investment fund in response. The fund invested in well-known companies such as Coinbase, Ripple, Bitpay and CoinLab in the early stage. In 2015, Silbert spun off this business and classified it into the new DCG (Digital Currency Investment Group), from which a huge encryption empire came out.
DCG has three most well-known subsidiaries - Grayscale, Genesis and Coindesk, which are the industry's top investment institutions, OTC transaction service providers and professional media in turn. In addition, DCG has invested in more than 150 blockchain and bitcoin-related companies in more than 30 countries around the world. From trading platforms, cryptocurrency wallets to media, and blockchain protocols, DCG's investment has almost covered the blockchain industry every aspect of. From these layouts, we can get a glimpse of Silbert's ambitions in the encrypted world. Of course, fortune makes heroes. As the earliest comprehensive investment institution, DCG has seized the opportunity and completed scale expansion. It has completed a huge amount of primitive accumulation of capital in the previous rounds of bull markets. Grayscale's investment actions are even regarded as the weather vane of the market.
In summary, apart from a certain amount of luck, what made Silbert possible was his firm belief in the encryption circle. He himself once spoke amazingly, calling for Bitcoin and Crypto, and he also frequently appeared on TV programs to promote encrypted assets. Prior to this, Silbert did not hesitate to spend a lot of money on TV commercials for Bitcoin. However, under the bull-bear market transformation, Silbert's good luck may have run out.
3. Silbert has been investigated by relevant US agencies, and the final result is still unknown
In view of the severe damage caused to the industry by Luna, Three Arrows Capital and FTX, many investors have begun to compare DCG founder Silbert to Do Kwon, Su Zhu and SBF. Silbert's results are nothing more than a few:
The DCG Group was insolvent and completely thunderstormed. The founder could not absolve himself of the blame, fell into legal disputes, and was even arrested and imprisoned;
After the company collapses, start the road to escape, or follow the example of SBF and get caught and pay high bail to get out of prison;
Raise funds from Binance or Wall Street giants, put off the urgent need, and wait until the next round of bull market.
However, at present, the situation of DCG and its founders is not optimistic, because the hole is indeed too big.
Bloomberg quoted people familiar with the matter as saying that the US SEC and other relevant departments are investigating DCG's internal fund transfer issues. A few days ago, Genesis, a subsidiary of DCG, asked for an open letter to repay its $900 million in debt, bringing the issue of capital exchanges between the two and DCG's financial crisis to the table.
According to reports, local prosecutors have begun to ask DCG founder Barry Silbert to interview and provide written documents. But the investigation is still in its early stages, and neither DCG nor any of its subsidiaries have been accused of wrongdoing.
In this regard, DCG issued a statement saying that it is legal and compliant, and the investigation is not true. The SEC and the U.S. Attorney's Office for the Eastern District of New York declined to comment. Another person familiar with the matter said that the investigation into Barry Silbert and his crypto empire began before FTX went bust.
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