Mike Novogratz: Galaxy Digital Still a Large Holder of EOS Tokens, Just Took Profit

• “We are a large holder of EOS tokens, and we strongly believe in the leadership,” Mike Novogratz
• Facts are chosen and arranged deceitfully & with poor journalism standards, Brendan Blumer, Block.one CEO on Bloomberg report on EOSIn an announcement made by Galaxy Digital on May 21, the crypto merchant bank founded by former hedge fund manager Michael Novogratz received $71.2 million after selling its share in Block.one, the company behind EOS blockchain.

The company closed the transaction on Monday after a tender offer in the ordinary shares of Block.one, claiming it made a 123 percent return on the realized investment. Following this, the company's share “will no longer represent a material investment position.”

“The acceptance of Block.one’s tender offer reflected a decision to rebalance the portfolio to maintain an appropriate level of diversification after the position increased due to its substantial outperformance relative to the remainder of the portfolio,” Novogratz said in the release.

However, it has been further added that it still in partnership with Block.one on other business such as Galaxy EOS VC Fund. Galaxy Digital and Block.one entered into a joint venture in January 2018.

In response to this, Novogratz took to Twitter to clarify that there are still a large holder of EOS tokens and excited for the June announcement.

Have you read Peter Thiel’s new book, “Zero To Exit Scam” https://t.co/mQQTCConHQ

— Max Keiser, tweet poet. (@maxkeiser) May 23, 2019

Galaxy Digital’s exit came as part of Block.one’s buyback program of 10 percent of its company shares.

6,567 percent Return to Earliest Investors

According to Bloomberg’s latest report, a buyback by the cryptocurrency startup will return about 6,567 percent to its earliest investors, in less than three years.

The buyback offer values at around $2.3 billion, up over 66 times that what it was valued in 2017’s seeding round. During 2017, the shares were offered at $22.5 per share while the repurchase price for the buyback is around $1,500 per share.

“A private buyback of this sort signals to me that the company believes that there are few growth opportunities in sight, or badly wants to consolidate ownership and avoid outside scrutiny,”

said Nic Carter, a partner at investment firm Castle Island Ventures in Boston.

The report added that at the end of February, the company had $3 billion including cash and investments while the majority of it is invested in US government bonds. It has also been mentioned that the company held about 140,000 Bitcoins.

“They designed a very clever mechanism to hoover up as much capital as possible,”

Bloomberg reported Richard Burton, founder of Balance.io as saying who pointed out how Bitcoin started on a shoestring and Ethereum raised just a few million dollars. He says, Block.one should be “beholden” to explain why they need so much funds and what they are doing with it.

In response to this report, Brendan Bloomer, CEO of Block.one said on Telegram that

“facts were chosen and arranged deceitfully and with poor journalism standards.”