March 29, 2024
Bitcoin News

Genesis Aims to Sell $1.6B Bitcoin, Ether Trust Holdings

Genesis, the bankrupt crypto lender, has requested approval from a U.S. judge to sell over $1.6 billion worth of bitcoin (BTC), ether (ETH), and ethereum classic (ETC) held in Grayscale’s trust products. This move comes as nearly $1.4 billion of Genesis’ assets were initially in Grayscale Bitcoin Trust (GBTC), which has now transitioned into a spot exchange-traded fund (ETF). The proposed sale, if approved, could exert additional selling pressure on the bitcoin market. In a similar scenario in January, the bankrupt exchange FTX sold over $1 billion in GBTC holdings, coinciding with a drop in bitcoin price from $49,000 to $39,000.

According to the filing, Genesis holds $165 million in Grayscale Ethereum Trust and $38 million in Grayscale Ethereum Classic Trust. Some GBTC shares were used as collateral and transferred to the Gemini crypto exchange under the Gemini Earn program. Furthermore, the filing reveals that Genesis is seeking an additional 31 million GBTC shares pledged to Gemini but not transferred.

Genesis and Grayscale were integral parts of Digital Currency Group’s crypto empire, which faced setbacks and controversies in 2022 as leading funds and exchanges collapsed. This chain of events led to Genesis declaring bankruptcy. Gemini emerges as Genesis’ largest creditor, estimating that over 100,000 of its users are impacted by the bankruptcy, with claims ranging from $1 billion to $10 billion.

Genesis is indebted to its leading 50 creditors with a total sum exceeding $3.5 billion, and this includes entities such as Gemini, Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund.

Image by Freepik

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