Barry Silbert exits Grayscale board amid ETF application review

abdelaziz Fathi

Barry Silbert and Mark Murphy, top executives at Digital Currency Group (DCG), have resigned from the board of directors at digital asset manager Grayscale Investments.

Their resignations are set to take effect on January 1, 2024, as per a recent filing by Grayscale Bitcoin Trust with the Securities and Exchange Commission (SEC).

Grayscale, a subsidiary of DCG, is currently in the process of seeking SEC approval to convert its Bitcoin Trust (GBTC) into a spot bitcoin exchange-traded fund (ETF). This application is part of a broader trend in the crypto industry, with several firms, including BlackRock and Ark 21shares, also awaiting SEC decisions on similar ETF proposals.

Barry Silbert, the founder and CEO of DCG, and Mark Murphy, the president of the parent company, will be stepping down from their roles on Grayscale’s board. Silbert, who served as the chairman, will be succeeded by Mark Shifke, DCG’s 64-year-old Chief Financial Officer. Matt Kummell, DCG’s Senior Vice President of Operations, and Edward McGee, Grayscale’s CFO, are also joining the board, filling the void left by the departing members.

The reconstituted board will include Shifke, Kummell, McGee, and Michael Sonnenshein, the CEO of Grayscale. However, the filing with the SEC did not specify the reasons for these changes.

These resignations come at a time when DCG faces legal challenges. In October, the New York Attorney General Letitia James sued DCG and Barry Silbert, alleging fraud involving more than 230,000 investors and over $1 billion in losses. The allegations, which Silbert and DCG have denied, accuse them of trying to conceal significant losses.

This lawsuit comes amid heightened scrutiny on key players in the crypto sector. Bankman-Fried, the co-founder of crypto exchange FTX and its trading arm Alameda, currently faces fraud and money laundering charges. The bankruptcy of FTX and Alameda in November had a domino effect, causing Genesis to declare bankruptcy in January.

Reiterating the gravity of the situation, the U.S. Securities and Exchange Commission (SEC) slapped Genesis and Gemini with charges relating to the unauthorized sale and offer of securities via its Earn lending program. The two entities, according to the prosecution, amassed billions in crypto assets from a vast pool of investors.

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