Barry Silbert and Mark Murphy resign from Grayscale’s board of directors

Two top executives at Digital Currency Group (DCG), Barry Silbert and Mark Murphy, recently announced their decision to resign from Grayscale Investments’ board of directors.

The pair will officially resign from the asset manager’s board starting on January 1, 2024, according to Grayscale Bitcoin Trust’s recent filing with the US Securities and Exchange Commission (SEC).

Barry Silbert, Founder/CEO of Digital Currency Group (DCG), and Mark Murphy, Chairman of DCG, have both resigned from the board of directors of Grayscale Investments, a subsidiary of DCG. Mark Shifke, CFO of DCG, will take over as Chairman of the Board of Directors of Grayscale… pic.twitter.com/D6PTpphBj4

— CryptoGains (@cryptogainsx) December 27, 2023

Silbert and Murphy to be replaced by other DCG and Grayscale executives

The timing of their departure is quite notable, as Grayscale is currently awaiting the SEC’s decision regarding its application to launch a Bitcoin spot ETF. As those who kept an eye on the industry likely know, Grayscale’s filing for a spot Bitcoin exchange-traded fund is only one of many, as several major companies in the financial industry are waiting for the regulator’s decision on their own proposals. Some of the biggest examples include BlackRock and ARK Investments.

Barry Silbert, who founded the DCG and acted as its CEO, alongside Mark Murphy, who is the president of Grayscale’s parent company, have decided to distance themselves from their roles on Grayscale’s board. Silbert will step down from his role as the chairman, and will be succeeded by DCG’s 64-year-old CFO, Mark Shifke.

Meanwhile, the bard will see the addition of two other members, including Grayscale’s current acting CFO, Edward McGee, as well as DCG’s Senior VP of Operations, Mat Kummell. The two will help fill the void left by Silbert and Murphy.

The newly reconstituted board will include Kummell, McGee, and Shifke, as well as Grayscale’s acting CEO, Michael Sonnenshein.

Regulatory scrutiny against crypto firms in the US continues

While the changes to the board’s membership are quite significant, the filing with the SEC did not reveal why Silbert and Murphy have decided to step down.

However, it is worth noting that the changes came at a difficult time for DCG, as the company is facing legal challenges. For example, both DCG and Silbert were sued by New York Attorney General Letitia James earlier this year, in October. The lawsuits accused Silbert and his company of fraud that involved over 230,000 investors, as well as more than $1 billion in losses.

Both Silbert and Digital Currency Group denied the allegations, which also accused them of trying to hide the fact that they suffered massive losses. Furthermore, the timing of the lawsuit is also significant as it came during a time of heightened scrutiny on key players in the crypto industry, including both individuals and companies.

In the last six months, the US authorities have filed numerous lawsuits against crypto exchanges and their top executives. Binance and Coinbase were the largest firms to suffer lawsuits, which eventually led to Binance’s CEO, Changpeng Zhao, having to step down from the exchange’s leadership, while the platform had to pay $4.3 billion in fines.

Then, there is the case of Sam Bankman-Fried, the co-founder and former CEO of FTX and its trading arm, Alameda, who faces fraud and money laundering charges. Other major platforms, such as Kraken, have also been slapped with lawsuits by the US regulators, primarily the SEC. The same is true with Genesis, which also declared bankruptcy in January of this year, and Gemini, another major US crypto exchange.

Most of the charges either accused the companies of offering securities or they found fault with the platforms’ respective lending programs.