Genesis Global, a leading digital currency firm, has been granted approval by the bankruptcy court to sell approximately 35 million shares of Grayscale Bitcoin Trust (GBTC), with an estimated value of $1.3 billion. The decision was made by U.S. Bankruptcy Judge Sean Lane during a court hearing held in White Plains, New York. This significant approval empowers Genesis to monetize its holdings of not only GBTC shares but also Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG).
In addition to the $1.3 billion worth of GBTC shares, Genesis also plans to sell over 11 million shares in two Grayscale Ethereum Trusts. These shares have a combined value exceeding $200 million, as outlined in a court filing from February 2nd. Collectively, Genesis will be offering approximately $1.6 billion worth of shares across GBTC, ETHE, and ETCG.
It is important to note that Genesis’s parent company, Digital Currency Group (DCG), originally sought to postpone the proposed sale until after the bankruptcy court had made a decision on the subsidiary’s debt repayment plan. DCG’s primary concern was that premature sales of Grayscale shares could potentially depress prices, resulting in minimal recoveries for Genesis creditors. Jeffrey Saferstein, representing DCG, emphasized the need for careful consideration and avoiding rapid unloading of shares. DCG also expressed a desire for input on the sale of Grayscale shares.
Despite the objections from DCG, Judge Sean Lane ruled in favor of Genesis, asserting the company’s right to determine the strategic sale of its assets. The judge recognized that the sales needed to be conducted carefully over time with the assistance of a broker to prevent any adverse effects on prices. Judge Lane justified his decision by highlighting the expertise of both Genesis and its creditors in the cryptocurrency space, suggesting that they are well-equipped to maximize the value of the Grayscale shares.
Meanwhile, Genesis is moving forward with its liquidation plan, which includes shutting down the company and repaying customers in either cash or cryptocurrency, depending on their deposits. Earlier this month, the company reached settlements with the U.S. Securities and Exchange Commission (SEC) and the New York Attorney General Letitia James, effectively resolving their objections to Genesis’s bankruptcy plan. The settlements stipulate that if Genesis has any surplus funds after repaying customers, it will pay a $21 million fine to the SEC. Any additional funds recovered from the bankruptcy proceedings will be used by the New York Attorney General to assist creditors who were allegedly defrauded by Genesis.
Genesis Global’s court approval to sell approximately $1.6 billion worth of Grayscale shares signifies a significant step for the company’s liquidation plan. Despite objections from its parent company, the court ruled in favor of Genesis, recognizing their expertise in the crypto space. As Genesis continues with its liquidation process, the sale of these shares will play a crucial role in repaying customers while also addressing creditors’ concerns. The successful execution of this strategic sale will undoubtedly contribute to the overall success and recovery of Genesis Global.