- The crypto lender aims to maximize funds for creditors amidst potential price fluctuations.
- Recent SEC’s approval allows GBTC conversion to spot Bitcoin ETF, facilitating cash redemption.
Genesis, the beleaguered crypto lending firm, has petitioned the United States Bankruptcy Court in the Southern District of New York, seeking permission to liquidate assets totaling a staggering $1.6 billion.
Among these assets are shares held in its Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG). The urgency stems from a desire to navigate potential price fluctuations and ensure maximum returns for the creditors.
Genesis, in a recent court filing, highlighted its intent to liquidate assets held in the GBTC, ETHE, and ETCG trusts. These trusts collectively hold approximately $1.6 billion, with specific allocations in Bitcoin, Ethereum, and Ethereum Classic.
As of September 2023, GBTC Trust held about 3.2% of all circulating Bitcoin, while ETHE Trust and ETCG Trust held 2.5% and 8.5% of circulating Ethereum and Ethereum Classic, respectively.
See Related: GBTC Price Prediction after Judges Raised Hope for Investors In Favour Of Grayscale
Crypto Trust Assets
The filing underscored the urgency of obtaining approval swiftly, with Genesis expressing concern about potential price fluctuations in the underlying assets. Genesis believes obtaining the authority to sell and liquidate the Trust Assets is crucial to mitigate risks and enhance the distribution of funds to creditors.
Recently, Genesis Global entered into a deal with the U.S. Securities and Exchange Commission (SEC), culminating in a $21 million settlement over its defunct Gemini Earn lending program. This resolution marked an important moment in the company’s efforts to navigate legal challenges and prioritize the repayment of its customers and creditors, Reuters reported.
The crypto lender filed for bankruptcy protection in January 2023, shortly before the SEC initiated legal action. The SEC lawsuit alleged that Genesis, in partnership with cryptocurrency exchange Gemini Trust, unlawfully sold securities through their Gemini Earn program, drawing investments from hundreds of thousands of investors.
