Genesis Global, a prominent player in the cryptocurrency industry, has been granted permission by the bankruptcy court to sell approximately 35 million shares of Grayscale Bitcoin Trust (GBTC). The estimated value of these shares amounts to a massive $1.3 billion. This decision was made by U.S. Bankruptcy Judge Sean Lane during a recent court hearing held in White Plains, New York. The approval not only allows Genesis to monetize its holdings of GBTC but also includes the sale of shares in Grayscale Ethereum Trust and Grayscale Ethereum Classic Trust.
Beyond the substantial $1.3 billion worth of GBTC shares, Genesis is planning to sell over 11 million shares in two Grayscale Ethereum Trusts. The combined value of this sale is projected to exceed $200 million, as indicated in a court document dated February 2. In total, the sale of shares in Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust by Genesis will amount to approximately $1.6 billion. It is crucial to note that Genesis’s parent company, Digital Currency Group (DCG), attempted to postpone the sale until the bankruptcy court finalizes the subsidiary’s debt repayment plan later this month. DCG expressed concerns that premature sales of Grayscale shares could lead to a decline in prices, resulting in lower recoveries for creditors of Genesis.
During the court proceedings, DCG’s representative, Jeffrey Saferstein, emphasized the importance of careful consideration to avoid sudden and significant share sell-offs. In addition, DCG requested the right to provide input on the sale of Grayscale shares. Despite these objections, Judge Sean Lane ruled in favor of Genesis, recognizing the company’s prerogative to strategically sell its assets. To ensure market stability, Lane emphasized that the sales would be executed gradually and with the assistance of a broker. This approach mitigates the risk of adversely affecting prices due to rapid unloading of shares. The judge defended his decision by highlighting the extensive experience and knowledge of Genesis and its creditors in the cryptocurrency realm, suggesting that they are well-equipped to maximize the value of the Grayscale shares.
Parallel to the asset monetization process, Genesis is proceeding with its liquidation plan. This plan involves winding down the company’s operations and repaying customers in either cash or cryptocurrency, depending on the nature of their deposits. Earlier this month, the company reached settlements with the U.S. Securities and Exchange Commission (SEC) and the New York Attorney General Letitia James, effectively resolving their objections to Genesis’s bankruptcy plan. According to the terms of these settlements, the SEC will receive a fine of $21 million if Genesis generates any surplus funds after repaying customers. Furthermore, any funds recovered from the bankruptcy proceedings will be utilized by the New York Attorney General to support creditors who were allegedly defrauded by Genesis.
Genesis Global has secured bankruptcy court approval to sell a substantial amount of Grayscale shares worth $1.3 billion. The court’s decision allows Genesis to monetize its holdings and strategically sell assets over time with the assistance of a broker. Despite concerns raised by its parent company, Genesis has the autonomy to determine the course of action for its assets. As the company proceeds with its liquidation plan, it aims to repay customers while also settling outstanding obligations with regulatory authorities. Ultimately, Genesis’s actions in these proceedings will shape the future of its business and the satisfaction of its creditors.