- Genesis is seeking court approval to offload Grayscale shares.
- The crypto lender is positioning itself to leverage current market conditions.
- The proposed sale is poised to inject a substantial $1.6 billion liquidity into Genesis.
Bankrupt Crypto lender Genesis, as part of its bankruptcy proceedings, is looking to liquidate its extensive list of assets. As creditors and regulators breathe down its neck, the company has set its sights on a key asset—Grayscale Bitcoin Trust (GBTC) shares.
Amidst the meteoric rise of Bitcoin ETFs, Genesis is strategically positioning itself to maximize returns for its creditors and stakeholders.
Genesis Eyes $1.6 Billion in Liquidity
Crypto lender Genesis Global Capital has filed a new motion with the US Bankruptcy Court in the Southern District of New York to offload nearly $1.6 billion in Grayscale trust assets.
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According to the filing, Genesis is seeking authorization to sell $1.4 billion worth of Grayscale Bitcoin Trust (GBTC) shares, $165 million in Grayscale Ethereum Trust shares, and Grayscale Ethereum Classic Trust shares valued at about $38 million.
Most of these GBTC shares initially served as collateral in Genesis’ transfer to Gemini through the Gemini Earn program. Genesis received the remaining shares following the bankruptcy of Three Arrows Capital.
In a separate motion, Genesis is also looking to expedite the relevant deadlines so that the sale motion can be heard at the bankruptcy court’s next hearing on Thursday, February 8.
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Gemini, in an announcement on its website, called the filing an “important step forward following the approval of the Grayscale Bitcoin Trust (GBTC) as an exchange-traded product (ETP) on January 10th.”
In addition to the sale, the filing further detailed Genesis’ efforts to reclaim an additional 31,180,804 shares, valued at approximately $1.2 billion. These shares were initially pledged to Gemini but await a court decision on ownership.
On the Flipside
- Genesis will pay the SEC a $21 million fine from remaining bankruptcy funds to resolve the regulator’s lawsuit.
- Grayscale Bitcoin Trust experienced outflows of $5.8 billion in the past two weeks.
Why This Matters
Liquidating these Grayscale shares is a crucial step for Genesis to address financial challenges and meet obligations to creditors. The sale aims to maximize value by capitalizing on the Bitcoin ETF hype, thereby optimizing recovery for stakeholders in the process.
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