Bankrupt Genesis seeks to sell over $1b worth of Bitcoin trust shares

Genesis Global Capital has petitioned the U.S. Bankruptcy Court for the Southern District of New York for permission to conduct a massive sale of its assets.

The company, a subsidiary of the embattled Genesis Global Holdco, is targeting the liquidation of approximately $1.4 billion worth of Grayscale Bitcoin Trust (GBTC) shares.

Genesis Global Capital filed a new motion with the U.S. Bankruptcy Court for the Southern District of New York seeking authorization to sell approximately $1.6 billion in trust assets, including Grayscale GBTC valued at approximately $1.4 billion and Grayscale Ethereum Fund…— Wu Blockchain (@WuBlockchain)

According to a Feb. 2 court filing, Genesis and its debtor affiliates have declared that disposing of the shares is a critical step in maximizing estate value and efficiently managing its assets.

The development comes as the overall cryptocurrency market undergoes severe fluctuations. The ability to swiftly convert these investments into more liquid assets is considered a viable strategy for stabilization efforts.

Genesis

Genesis revealed in the filing that it holds a significant number of GBTC shares—units that correlate to a specific portion of Bitcoin (BTC) and allow investors a regulated means of gaining exposure to the cryptocurrency’s price movements.

The urgency of the motion is palpable, as the bankrupt crypto lender has filed a concurrent request to expedite the proceedings to coincide with the court’s upcoming hearing on Feb. 8.

These GBTC shares are particularly notable; they are part of the original collateral for Gemini’s Earn program and include holdings acquired amidst the collapse of Three Arrows Capital.

Another point of contention stems from the claim to an additional 31.2 million GBTC shares, valued at around $1.2 billion—assets pledged to Gemini but caught in a legal limbo of unsettled ownership.

On its end, Gemini has echoed a cautiously optimistic tone, labeling the motion a critical advancement that follows the approval of GBTC as an exchange-traded product earlier this year. 

Earn Update: Late yesterday, Genesis filed a Motion Authorizing Sale of Trust Assets. This is an important step forward following the approval of the Grayscale Bitcoin Trust (GBTC) as an exchange-traded product (ETP) on January 10th. As detailed in the motion, Genesis is seeking…— GeminiTrustCo (@GeminiTrustCo)

Offloading such a substantial quantity of GBTC, which approximates 3.2% of Bitcoin’s total circulating supply, will likely have notable implications for the broader market.

The plans for liquidation also include assets connected to Ether (ETH) and Ethereum Classic (ETC), reinforcing Genesis’ focused scheme to increase its liquidity and facilitate creditor remuneration.

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2024-02-04 22:03