The market may have gotten desensitized to the prevalence of seemingly incestuous business links across the cryptosphere.
This week, details emerged suggesting that the founders of Decentraland had committed approximately 7.8 million US dollars to the crypto currency loan company Genesis Global, which is controlled by Decentraland's primary investor, Digital Currency Group.
DCG, led by CEO Barry Silbert and the owner of Genesis, made an investment in Decentraland and became a major real estate owner.
In addition, DCG subsidiary Grayscale simultaneously sought funds for a trust called Decentraland Trust, through which investors may make passive investments in MANA, the native digital currency of the Metaverse platform.
Full disclosure: The Decentraland Foundation has a credit against Genesis of principal amount approx USD ~7.8M as of today. The Treasury remains healthy and the credit amount does not represent a substantial part of the Foundation's treasury.
— Decentraland (@decentraland) January 20, 2023
In short, a large portion of the money that began moving when DCG invested in Decentraland has returned to its source.
The revelation (1) that Decentraland's creators had lent it cash to DCG's lenders firm was made public in Genesis's bankruptcy documents at a time when the crypto world has been roiled by tales of corrupt practices and interacting interests thanks to a seemingly never-ending barrage of news.
The bankruptcy of Genesis reveals its ties to Decentraland
On Thursday, Genesis Global filed for Chapter 11 bankruptcy protection, revealing a list of its 50 biggest non-insider unsecured creditors. Companies associated with Decentraland's co-founders Esteban Ordano, Ari Meilich, and CFO Santiago Esponda were among the 50 mentioned.
In court documents, Esponda's Decentraland email account was named as the liaison for Heliva International, a Panamanian firm to whom Genesis owes $55 million. In the Genesis bankruptcy filing, Ordano, who currently consults for Decentraland, is named as the contact for a company called Winah Securities, to whom Genesis owes around $27 million.
Finally, Genesis owes Big Time Studios, a game firm controlled by Meilich, the second co-founder of Decentraland, $20 million. Even though Meilich launched Big Time in 2020, he still serves as an advisor for Decentraland.
According to what Ordano informed The Block, Winah is not affiliated with Decentraland. Meilich said nothing. As of this writing, Esponda has not responded to calls for comment.
The Decentraland-DCG Link
DCG declared its intention to build "One Time Square" in Decentraland at the end of 2021, just in time for New Year's Eve festivities. DCG announced plans to host a party in the virtual world at the newly built venue, promising "music and entertainment performances, rooftop VIP lounges, CryptoArt exhibitions, and immersive games."
In the same statement, DCG also claimed to be "one of the major owners of digital real estate" in the virtual world of Decentraland.
Decentraland was initially developed in 2017 by Manu Araoz. After that, Araoz and the other creators, Ordano and Meilich, established the first city in the virtual world and named it Genesis City.
Decentraland is a popular metaverse environments, along with The Sandbox. Even JPMorgan got on the bandwagon, building a club in Decentraland late last year.
Late last year, Decentraland was valued at over $1 billion, despite allegations of little usage and a lengthy crypto winter in which digital-asset prices plummeted.
