Genesis Global has recently been granted approval by the bankruptcy court to sell approximately 35 million shares of Grayscale Bitcoin Trust, with a total estimated value of $1.3 billion. This decision was made by U.S. Bankruptcy Judge Sean Lane during a court hearing in White Plains, New York. The authorization given to Genesis allows them to liquidate their holdings in Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust. 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, totaling more than $200 million.
Genesis’s parent company, Digital Currency Group (DCG), raised concerns about the proposed sale of Grayscale shares. DCG attempted to delay the sale until after the bankruptcy court makes a decision on the subsidiary’s debt repayment plan later this month. The company expressed worries that premature sales of Grayscale shares could potentially lower prices, resulting in reduced recoveries for Genesis creditors. Jeffrey Saferstein, representing DCG, stressed the importance of careful consideration to avoid any hasty unloading of shares and requested the right to provide input on the selling process.
Despite DCG’s objections, Judge Sean Lane ruled in favor of Genesis, highlighting the company’s right to decide on the strategic sale of its assets. He emphasized that the sales would be carried out gradually with the help of a broker to prevent any sudden drop in prices. Judge Lane justified his decision by recognizing the expertise of Genesis and its creditors in the cryptocurrency space, indicating their ability to maximize the value of the Grayscale shares through a thoughtful and calculated approach.
Genesis is currently proceeding with its liquidation plan, which involves winding down the company and repaying customers either in 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, resolving their concerns regarding the bankruptcy plan. As per the agreements, the SEC will receive a $21 million fine if Genesis has leftover funds after repaying customers. Additionally, any funds recovered from the bankruptcy proceedings will be utilized by the New York Attorney General to aid creditors who may have been defrauded by Genesis.