Bankrupt Genesis Converts GBTC Shares into Bitcoin
Genesis, the bankrupt crypto lending firm, has completed the conversion of approximately 36 million shares of Grayscale Bitcoin Trust (GBTC) into Bitcoin. This move is part of the company’s efforts to settle its debts with creditors. According to a recent report by Bloomberg, the GBTC shares were liquidated on April 2 at a value of around $58.50 per share at that time.
Genesis Offloads GBTC Shares
The share price of GBTC has surged by approximately 50% since Genesis initially sought permission from the U.S. bankruptcy court to sell the shares. Genesis began the process of offloading the GBTC shares back on February 2, when the shares were priced at $38.50.
- Genesis liquidates 36 million shares of GBTC into Bitcoin
- Shares were sold at $58.50 per share
- Share price of GBTC surged by 50%
Genesis Buys $2.1 Billion Worth of Bitcoin
The total amount generated from the sale of GBTC shares amounted to $2.1 billion, allowing Genesis to acquire 32,041 Bitcoin on April 2 at a price of $65,685 per Bitcoin. These acquired Bitcoins will be used by Genesis to fulfill its obligations towards creditors, with a current value of approximately $2.18 billion.
- Genesis acquires 32,041 Bitcoin
- Total amount generated from sale reaches $2.1 billion
- Bitcoin purchased at $65,685 per Bitcoin
Market Impact of Genesis Sell-Off
Concerns arose regarding the potential impact of Genesis’s substantial sell-off on the crypto market. To address these concerns, cryptocurrency exchange Coinbase assured the community that the funds are likely to remain within the crypto ecosystem. Coinbase explained that the bankruptcy plan enables Genesis to convert GBTC shares into Bitcoin assets for creditors or sell the shares outright and distribute the cash.
- Coinbase reassures market about effects of sell-off
- Funds expected to stay within the crypto ecosystem
- GBTC shares can be converted or sold for cash
Genesis Settles with the SEC
In the bankruptcy court filing last month, Genesis announced a settlement agreement with the SEC, agreeing to pay $21 million to resolve the civil lawsuit. The SEC’s lawsuit mentioned that Gemini Earn had around 340,000 customers and $900 million in assets under management in November 2022. Following FTX’s bankruptcy the same month, Genesis temporarily halted Gemini Earn withdrawals due to market turmoil and liquidity issues.
- Genesis reaches settlement agreement with the SEC
- Agrees to pay $21 million to resolve the civil lawsuit
- Gemini Earn had 340,000 customers and $900 million in assets
Legal Proceedings Against Genesis
After the SEC’s lawsuit in January of the previous year, Genesis filed for bankruptcy. Gemini agreed to return $1.1 billion to Gemini Earn customers through the bankruptcy process as part of a settlement with New York’s financial regulator. A federal judge decided that the SEC’s lawsuit against Gemini and Genesis would proceed in court, rejecting the companies’ motions to dismiss and also denying their request to halt the SEC’s demands.
- Genesis files for bankruptcy following SEC lawsuit
- Gemini to return $1.1 billion to customers in settlement
- Judge rules SEC lawsuit against Gemini and Genesis will proceed
Hot Take:
In Summary
Genesis, the bankrupt crypto lending firm, has converted 36 million GBTC shares into Bitcoin to settle its debts with creditors. The sale of GBTC shares amounted to $2.1 billion, enabling Genesis to acquire 32,041 Bitcoins. Concerns about the market impact of the sell-off were addressed by Coinbase, assuring that the funds would remain in the crypto ecosystem. Genesis’s settlement with the SEC involves paying $21 million to resolve the civil lawsuit. The legal proceedings against Genesis will proceed as the SEC’s lawsuit was deemed plausible by the judge.
Sources:
Bloomberg Law
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