- Genesis has bought 32,000 bitcoins.
- The crypto lender looks to use the tokens to repay its customers.
- Genesis was able to make the sale after dumping its Grayscale shares.
In February, bankrupt crypto lender Genesis received court approval to liquidate its giant pile of Grayscale shares as part of its proceedings, hoping to secure over $1 billion.
After finally dumping its Grayscale shares, the defunct crypto lender has taken a rather unique approach to maximizing the returns of its creditors and stakeholders.
Genesis Buys Bitcoins to Hedge Creditor Funds
Court documents filed on Friday, April 5, revealed that Genesis completed the sale of its Grayscale Bitcoin Trust (GBTC) shares earlier this week. According to the report, the bankrupt crypto lender sold 36 million shares, each valued at approximately $58.50 at the time of sale.
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Subsequently, Genesis used the proceeds to purchase over 32,000 bitcoins, amounting to $2.1 billion based on a token price of $65,845. As official documents outline, the crypto lender intends to allocate these tokens toward repaying creditors, particularly Gemini Earn creditors.
Genesis’ decision aligns with rules stipulated in its bankruptcy plan, which specify two options: either convert the GBTC shares into bitcoins for the creditors or sell the shares outright and distribute the cash.
Given Bitcoin’s promising prospects, with experts projecting a valuation of $80,000 by the end of the year—Genesis’ decision to buy the asset puts it in a more suitable position to maximize returns for creditors and stakeholders alike.
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At press time, Genesis remains indebted to its creditors for over $3.5 billion and awaits approval for a repayment plan from its bankruptcy court.
On the Flipside
- DCG claims Genesis’s current plan would see “hundreds of millions of dollars more than the full amount of their petition date claims” go to lenders.
- Genesis will pay the SEC a $21 million fine once it fully repays its creditors.
Why This Matters
Genesis’ decision to buy bitcoins with creditors’ funds acts as a hedge and positions the company to maximize returns and repay its creditors in full.
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