Genesis cleared to sell its $1.6 billion GBTC shares
The post Genesis cleared to sell its $1.6 billion GBTC shares appeared on BitcoinEthereumNews.com.
A U.S. bankruptcy judge recently granted permission to Genesis, a bankrupt crypto trading desk and lender, to sell approximately $1.6 billion worth of its shares in Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG). This decision is part of Genesis’ strategy to repay its creditors following its Chapter 11 bankruptcy protection filing in January 2023. Judge clears Genesis to sell its shares Despite objections from Digital Currency Group (DCG), Genesis’ parent company, regarding the timing of the sale in relation to the overall bankruptcy plan, the judge approved the request. DCG expressed concerns that the repayment plan favored a select group of creditors and could lead to overpayment. This objection stemmed from the fact that the prices of digital assets like Bitcoin (BTC) and Ethereum (ETH) had risen since the company filed for bankruptcy. However, the judge sided with Genesis, noting that the proceeds from the sale would be used to repay customers and avoid monthly fees associated with trust agreements. This decision is part of Genesis’ broader liquidation plan, which also includes settlements with regulatory bodies to prioritize customer repayments. The approval of Genesis’ entire bankruptcy plan will be further considered at a court hearing scheduled for February 26. Genesis encountered financial troubles starting in November 2022, primarily due to significant loans made to bankrupt hedge fund Three Arrows Capital. The situation worsened as other entities like Alameda Research and FTX faced challenges, leading to Genesis filing for Chapter 11 bankruptcy protection in January 2023. Implications for the cryptocurrency market The approval of the sale by the judge is expected to add selling pressure to GBTC, which has already experienced significant outflows in recent weeks. This trend intensified after the U.S. Securities and Exchange Commission approved Grayscale’s conversion of GBTC to a spot…
Filed under: News - @ February 17, 2024 12:12 am