Genesis Global Capital moves to liquidate $1.6 billion from Grayscale Trust amid bankruptcy.
Genesis Global Capital has petitioned the U.S. Bankruptcy Court to sell approximately $1.6 billion of its Grayscale Bitcoin, Ethereum and Ethereum Classic Trust holdings. This strategic liquidation aims to maximize creditor repayment amid potential market volatility in accordance with the recent SEC settlement.
Genesis Global Capital, a cryptocurrency lender currently undergoing bankruptcy proceedings, filed with the U.S. Bankruptcy Court for the Southern District of New York to liquidate Grayscale’s Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) holdings. took meaningful steps to request permission. , Ethereum Classic Trust (ETCG), etc., with a total asset value of approximately $1.6 billion. The request is part of Genesis’ broader strategy to maximize funds available for distribution to creditors amid potential fluctuations in underlying asset prices.
Assets subject to liquidation include approximately $1.4 billion in GBTC stock, $165 million in ETHE stock, and $38 million in ETCG stock. Genesis emphasized the urgency of obtaining approval for the sale of assets to mitigate risks associated with price volatility in the cryptocurrency market and facilitate timely distributions to creditors.
In addition to seeking to sell these trust assets, Genesis aims to regain legal ownership of an additional 31,180,804 shares worth approximately $1.2 billion. gemini But it was never transferred. This matter is currently awaiting resolution by the courts. These shares were initially pledged by Genesis to Gemini for the Gemini Earn program.
Genesis’ liquidation request comes after the company reached an agreement with the U.S. Securities and Exchange Commission (SEC) to resolve lawsuits related to its operation of the Gemini Earn program. As part of the settlement, Genesis agreed to pay a $21 million penalty from funds remaining after the bankruptcy proceedings are completed. The settlement aims to resolve the SEC’s claims and allows Genesis to focus on maximizing returns for its creditors without the burden of lengthy litigation.
The motion to liquidate the assets will be heard at a hearing on February 8, underscoring Genesis’ intention to expedite the process despite ongoing challenges. This strategic liquidation effort is a pivotal step in Genesis’ bankruptcy proceedings and efforts to resolve its financial obligations, especially considering GBTC’s recent conversion to an in-kind Bitcoin ETF that allows for stock cash redemptions.
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