Bankrupt crypto lender Genesis seeks approval to sell $1.6B of trust assets

0


Bankrupt crypto lending firm Genesis has requested the United States Bankruptcy Court in the Southern District of New York for permission to liquidate assets held in its Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), totaling approximately $1.6 billion.

In a recent court filing, Genesis emphasized the urgency of obtaining approval to sell the trust assets ahead of any potential fluctuations in the prices of the underlying assets—Bitcoin (BTC) Ethereum (ETH), and Ethereum Classic (ETC). Genesis stated that the aim is to maximize the funds available for distribution to creditors.

“The Debtors believe it would be beneficial to have the authority to sell and liquidate the Trust Assets to reduce any risk that fluctuations in price might have on the Debtors’ estates and to facilitate distributions to creditors.”

Genesis trust assets. Source: Ctfassets

Genesis highlighted that, following approval from the United States Securities and Exchange Commission (SEC) on January 10, the recent conversion of GBTC to a spot Bitcoin exchange-traded fund (ETF) now allows for the redemption of shares in cash.

Cointelegraph recently reported that since the conversi, there has been a significant exodus of investors selling their GBTC shares.

On Jan. 22, bankrupt cryptocurrency exchange FTX sold 22 million GBTC shares, valued at nearly $1 billion, equating to more than two-thirds of its entire holdings.

Related: BlackRock and ProShares Bitcoin ETFs overtake GBTC’s daily trading volume

However, in the filing Genesis declared that it intends to maximize the sale proceeds from the crypto assets.

“Both the Debtors and Gemini shall, on a good faith basis, use reasonable best efforts to maximize the market price of any Trust Assets or Initial GBTC Shares and the proceeds received from any sale thereof or any redemption thereof,” the filing stated.

Magazine: GBTC drops BTC stake by 21%, Celsius exits bankruptcy, and more: Hodler’s Digest, Jan. 28 – Feb. 3