Larry Summers is a Harvard University professor and former financial adviser to the Obama administration. He just announced that he has cut ties with cryptocurrency conglomerate Digital Currency Group (DCG). Summers joined the now-struggling company as a senior consultant in 2016, one year after it was founded. The basic question is that of the plausible reason that motivated these resignations.
DCG and Larry Summers: the general context
Digital Currency Group (DCG) is a company that invests and builds businesses based on bitcoin and blockchain. Founded in 2015 by Barry Silbert, it is based in New York. DCG has invested in many companies in the bitcoin and blockchain universe. For example, there are Coinbase, Ripple and Chainalysis. In addition to its investments, DCG also provides resources and support for its businesses. The company is particularly focused on promoting the adoption and development of digital currencies and blockchain technology.
It’s unclear exactly when Summers stepped down from his role, which he actually quit several months ago. However, the former US Treasury secretary was listed on DCG’s website as a member of the company’s advisory board through November. This information has since been removed from the DCG website. Additionally, Summers’ personal website was updated Wednesday, removing any mention of his six-and-a-half-year relationship with DCG from his bio. A spokesperson for Summers said the professor’s resignation was part of a “reduction in commitments” but declined to specify what other positions Larry Summers had recently given up.
FTX comments controversial
Larry Summers has previously been criticized for his role on DCG, most recently for his comments on Sam Bankman-Fried’s FTX exchange. In mid-November, Summers was quoted extensively comparing FTX to Enron in an interview with Bloomberg TV. Following that interview, influential Washington watchdog group The Revolving Door Project said Summers and Bloomberg should have disclosed the top economist’s ties to cryptocurrency firms, including DCG. Furthermore, DCG’s ties to FTX had not been disclosed either.
DCG has been under pressure since the beginning of November. Indeed, Genesis Global Capital, a major cryptocurrency lender and subsidiary of DCG, halted withdrawals from its clients following the FTX crash. This DCG subsidiary was a major business partner of FTX. He had about $175 million of his assets tied to the exchange. However, as everyone knows, FTX is now bankrupt from its recent crash. DCG also had a small equity stake in FTX. Therefore, this resignation seems to be a new echo of the earthquake caused by the bankruptcy of FTX.
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To the angelism of the intercessors of the current monetary system, I oppose DeFi, digital assets and the metaverse. Lawyer in Luxembourg, I am interested in cryptocurrency investment funds.