U.S. Bankruptcy Judge Approves Sale of Genesis’ GBTC Shares
A U.S. bankruptcy judge has granted permission to Genesis, a bankrupt crypto trading desk and lender, to sell $1.6 billion worth of its Grayscale Bitcoin Trust (GBTC) shares. This decision is part of Genesis’ plan to repay its creditors, which also includes selling shares in Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG).
Objections from Digital Currency Group
Digital Currency Group (DCG), the parent company of Genesis, raised objections to the sale, arguing that it may be premature and favor certain creditors over others. DCG believes that some creditors will receive more than others due to the increased prices of digital assets since Genesis filed for bankruptcy in January 2023.
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Judge’s Approval and Genesis’ Plan
Despite the objections, the judge approved the sale. Genesis plans to use the proceeds to repay customers and avoid monthly fees associated with its trust agreements. This approval is part of Genesis’ broader liquidation plan, which includes settlements with regulatory bodies. The court will further consider the approval of Genesis’ entire bankruptcy plan on February 26.
Genesis’ Troubles and Selling Pressure on GBTC
Genesis faced financial difficulties starting in November 2022 due to loans made to bankrupt hedge fund Three Arrows Capital. The recent approval means that GBTC will experience additional selling pressure after previous waves of selling when Grayscale was approved for a Bitcoin ETF conversion. Despite outflows, GBTC remains the dominant product in its space.
Hot Take: Genesis Granted Permission to Sell GBTC Shares Worth $1.6 Billion
A U.S. bankruptcy judge has granted permission to Genesis, a bankrupt crypto trading desk and lender, to sell $1.6 billion worth of its Grayscale Bitcoin Trust (GBTC) shares. This decision is part of Genesis’ plan to repay its creditors, which also includes selling shares in Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG). Despite objections from Digital Currency Group, the judge approved the sale. Genesis aims to use the proceeds to repay customers and avoid monthly fees associated with its trust agreements. This development adds to Genesis’ broader liquidation plan and will result in additional selling pressure on GBTC.
