Genesis seeks court approval to sell Grayscale shares
Genesis seeks court approval to sell Grayscale shares
Cryptocurrency lender Genesis Global Capital has filed a motion with the US Bankruptcy Court seeking permission to sell trust assets, including the Grayscale Bitcoin Trust (GBTC), the Grayscale Ethereum Trust, and the Grayscale Ethereum Classic Trust. The total amount is approximately $1.6 billion.
By liquidating the assets in the Grayscale trusts, bankrupt Genesis is trying to take advantage of good market timing and optimize its debts to creditors, according to CoinGape.
Genesis is seeking court approval to liquidate the assets. The move is part of the company's plan to emerge from bankruptcy. The assets up for sale are mostly shares in various funds. Genesis' plan is to repay clients the cash or cryptocurrency they contributed to the Earn program.
The Genesis report includes a list of assets up for sale. They include $1.4 billion in Grayscale Bitcoin Trust shares, $165 million in Grayscale Ethereum Trust shares, and $38 million concentrated in Grayscale Ethereum Classic Trust shares. Genesis is asking the Court for expedited consideration of the divestiture proposal at the February 8 hearing.
Genesis has presented its intentions as seeking to maximize returns for the company's creditors and stakeholders in bankruptcy. The company had previously decided to liquidate its assets into funds, the next link after its cryptocurrency lending commitments, including the Gemini pledge under the Gemini Earn program.
The asset sale demonstrates the company's efforts to legally recover 31,180,804 additional shares worth $1.2 billion that are pledged to Gemini and are awaiting a court ruling on ownership.
The filing with the court requesting permission to liquidate the assets was hailed as a significant achievement by Gemini, the major creditor. Gemini said that Genesis' motion would require Gemini to be authorized to monetize the original collateral in the form of 30,905,782 shares of Grayscale Bitcoin Trust.
Once Grayscale Bitcoin Trust is approved as a spot exchange product, the price and liquidity of the assets should increase significantly.
Genesis also confirmed its intention to settle Securities and Exchange Commission (SEC) claims and pay a $21 million fine. The lawsuit stems from regulatory concerns about the Gemini Earn program, which Genesis used to restructure its debt.
The proposed sale is a key component of Genesis' broader strategy to address its financial difficulties and meet its obligations to creditors.
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