Grayscale’s GBTC Faces Sell Pressure as Genesis Wins Ruling
Grayscale’s GBTC could experience sell pressure and outflows following a ruling in the Genesis bankruptcy case. U.S. Bankruptcy Judge Sean Lane has approved Genesis, a subsidiary of Digital Currency Group (DCG), to offload shares from Grayscale crypto products. This includes GBTC, ETHE, and ETCG. The ruling allows Genesis to liquidate 35 million GBTC shares worth $1.6 billion, along with $182 million in ETHE and $3 million in ETCG. Genesis has the option to sell for Bitcoin or convert to cash. The court also barred DCG from consulting due to potential bias.
Genesis Settles Lawsuits
Genesis, the beleaguered crypto lender, has reportedly settled lawsuits within the first two months of the year. After receiving a $700 million loan pay from DCG, Genesis reached an agreement with New York’s Department of Financial Services, resulting in an $8 million fine and the repossession of its BitLicense. The lender also settled a $21 million lawsuit with the U.S. SEC regarding Gemini Earn. However, a major lawsuit filed by New York Attorney General Letitia James remains pending, alleging fraud involving Genesis, Gemini, DCG, and its affiliates before the crypto contagion in 2022.
Conclusion
The recent ruling in the Genesis bankruptcy case has significant implications for Grayscale’s GBTC. With approval to offload shares from various Grayscale crypto products, including GBTC, Genesis can now liquidate millions of shares worth billions of dollars. This could result in sell pressure and potential outflows from GBTC. Additionally, Genesis has settled several lawsuits within the past few months, including fines and settlements with regulatory bodies. However, a major lawsuit filed by the New York Attorney General is still pending, alleging fraud by Genesis, Gemini, DCG, and its affiliates. The outcome of this case could have further implications for Genesis and the broader crypto industry.
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