The cryptocurrency tide is flowing out, and it looks more and more like Digital Currency Group (DCG) has been skinny dipping.
But let’s be clear: The current crypto contagion isn’t a failure of crypto as a technology or long-term investment. DCG’s problem is one of failure by regulators and gatekeepers.Since its 2013 inception, DCG’s Grayscale Bitcoin Trust (GBTC), the largest Bitcoin (BTC) trust in the world, has offered investors the ability to earn a high rate of interest — above 8% — simply by purchasing cryptocurrency and lending it to or depositing it with DCG.
In many ways, the company performed a major service to the crypto industry: making investments into crypto understandable and lucrative for beginners and retail investors.
And during the crypto market’s bull run, everything seemed fine, with users receiving market-leading interest payments.But when the market cycle changed, the problem at the other end of the investment funnel — the manner in which DCG leveraged user deposits — became more apparent.Read more on cointelegraph.com