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Genesis Global Capital Seeks Approval to Sell $1.6 Billion Trust Assets

Genesis Global Capital Seeks Approval to Sell $1.6 Billion Trust Assets

Genesis Global Capital Seeks Permission to Liquidate Shares in Grayscale Trusts

Genesis Global Capital, the bankrupt crypto lending firm, has filed a motion in a US Bankruptcy Court to sell its shares in the Grayscale Ethereum Trust (ETHE), Grayscale Bitcoin Trust (GBTC), and Grayscale Ethereum Classic Trust (ETCG). These shares have an estimated value of $1.6 billion. This move is intended to reduce the risk of price fluctuations and maximize funds available to creditors for distribution.

Genesis Settles SEC Lawsuit Over ‘Earn’ Program

In a court filing, it was revealed that Genesis recently settled a lawsuit with the US Securities and Exchange Commission (SEC) regarding its Gemini Earn program. Genesis agreed to pay a $21 million civil penalty to end the lawsuit. However, the payment is conditional on the company fully repaying its customers and creditors as part of its Chapter 11 bankruptcy proceedings.

Genesis Faces Penalties and Surrenders License

Prior to its settlement with the SEC, Genesis also agreed to pay an $8 million penalty and surrender its New York Department of Financial Services (NYDFS) license. This came after an investigation found significant compliance failures, including non-compliance with anti-money laundering (AML) and cybersecurity programs. As a result, Genesis has ceased its operations in New York.

Hot Take: Genesis Struggles with Legal Troubles and Moves to Liquidate Shares

Genesis Global Capital is experiencing significant legal troubles, including settling a lawsuit with the SEC and facing penalties from New York regulators. As a result, the bankrupt crypto lending firm is seeking permission to liquidate its shares in various Grayscale trusts. This move aims to mitigate potential price fluctuations and ensure maximum funds are available for distribution to creditors. Genesis continues to navigate its bankruptcy proceedings while addressing regulatory concerns.

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Genesis Global Capital Seeks Approval to Sell $1.6 Billion Trust Assets