CNBC works hard to hide the worrisome news of "crypto contagion" after FTX/Alameda collapse

CNBC is a brazen shill for any firm remotely connected to Wall Street and/or investment.  As such, they're *really* good at writing articles that put bad news in the last paragraph-- and camouflaged so outsiders don't recognize it.

Oh, does that sound too cynical?  Paranoid?  Like "tinfoil-hat" stuff?  Ah.  Well...  In the wake of the collapse of $32 BILLION FTX and the second Bankman-Fried firm, Alameda, investors are starting to have questions about the solvency of other crypto firms.

One of those is called Grayscale, touted as an "asset manager running the world’s largest bitcoin fund."

As most firms scrambled to release audited statements, Grayscale said it would NOT show proof of reserves to the public, citing "security concerns."

Grayscale said it realized that failing to disclose a proof of reserves "would be a disappointment to some,” but then followed with a word-ink-cloud claiming showing proof of reserves would "circumvent complex security arrangements” that "keep investors’ assets safe."

Everyone should recognize that that's obvious, brazen horseshit.

Grayscale’s flagship fund is the Grayscale Bitcoin Trust (GBTC). It's now trading at a 45% discount to the price of its sole asset, Bitcoin.  That difference is curious, since you'd think the "trust" would reflect the value of its sole asset.  Hmmm...

While bitcoin is down 72% over the last 12 months, GBTC has dropped 82% in that same period.

In its statement on Friday, Grayscale said each of its "digital asset products" is a “separate legal entity” and reiterated that those "digital assets" are “stored under the custody of Coinbase Custody Trust Company,” which says it's holding $10.2 billion in bitcoin for Grayscale.

Now why would a company take the trouble to point out that "each of its digital-asset products is a separate legal entity"?

One obvious reason would be to reassure ivestors that insolvency of one "fund" wouldn't drag the others down with it.

Grayscale added that “laws, regulations and documents" prohibit the digital assets underlying the "products" from being lent, borrowed, or otherwise encumbered.”  Wow, that's a relief, eh?  Cuz breaking "laws" could be messy, eh?

Now, finally, in the next-to-last paragraph of CNBC's piece, we learn that the parent company of Grayscale is a company called "Digital Currency Group" [Barry Silbert].  And that that company operates another subsidiary called "Genesis."

And "Genesis" is actually two entities: Genesis Global Trading is billed as a "crypto investment bank," while "Genesis Global Capital" is the "lending arm."

Last week the "lending arm" "paused redemptions."  Wait, how does a "lending firm" have "redemptions"?  Well, where did Genesis get the money to loan to borrowers?  Might that be from the "crypto investment bank" sister company?  So could it be that the "pause" in redemptions actually pertains to the "investment bank" rather than the lending arm?

Translation:  'During this temporary 'pause,' we won't let you withdraw your money. But don't worry, it's just 'temporary.' Hmmm....

Inquiring minds want to know why "paused redemptions" was in the next-to-last sentence of the article.  And of course CNBC doesn't bother explaining what that phrase means.

To find out, you need to go to a statement from Genesis a week earlier:  The company said “Our trading and custody businesses remain fully operational.  Our top priority is to serve our clients and preserve their assets, so we have taken the difficult decision to temporarily suspend redemptions and new loan originations in the lending business. We are working diligently to shore up the necessary liquidity to meet our lending client obligations.”

Wait...what does "We are working...to shore up the necessary liquidity to meet our...obligations" mean?

You don't suppose... Nah, dat jus' crazy-talk.