DCG and Grayscale Oppose Genesis’ Plan to Sell Trust Shares Worth $1.6B
On February 12, Digital Currency Group (DCG) and Grayscale raised objections to bankrupt lender Genesis’ plan to sell off its assets, which include shares in Grayscale’s Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), amounting to around $1.6 billion.
Genesis Files for $1.6B Liquidation Plan
Defunct crypto lender Genesis has submitted a motion as part of its bankruptcy proceedings, requesting judicial approval to sell specific trust assets valued at around $1.6 billion.
Genesis’ Bankruptcy Declaration and Financial Troubles
Genesis declared bankruptcy last year after experiencing losses and controversies that affected its parent company, Digital Currency Group. The firm faced financial troubles and halted withdrawals in October 2022, revealing debts exceeding $3.5 billion.
Assets Included in the Liquidation Plan
The assets slated for liquidation include shares of Grayscale Bitcoin Trust (GBTC) valued at about $1.4 billion, shares of Grayscale Ethereum Trust worth approximately $165 million, and shares of Grayscale Ethereum Classic Trust totaling roughly $38 million.
Genesis Seeks Legal Ownership of Additional Shares
Genesis also aims to assert legal ownership over additional shares pledged to Gemini, worth approximately $1.2 billion. These shares are currently under review by the court.
Grayscale and DCG Oppose Genesis Proposal
Both DCG and Grayscale have objected to Genesis’ plan to liquidate the trust shares. Grayscale claimed it was not properly notified about the filing, while DCG argued that Genesis’ reasons for selling the assets were unjustified.
Recommendations and Future Actions
DCG recommended postponing asset sales until after the Debtors’ Amended Plan hearing and suggested appointing a specialized broker for the assets. Both DCG and Grayscale expressed their willingness to address concerns and present evidence during the hearing.
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