Genesis Global Capital, a crypto lender facing bankruptcy, has filed a motion with the U.S. Bankruptcy Court in the Southern District of New York, seeking approval to sell approximately $1.6 billion in trust assets. The move comes as part of the company’s efforts to address its financial challenges and settle legal matters.
The assets in question, held by Genesis, a subsidiary of the Digital Currency Group, include significant shares in Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust. The GBTC shares alone are valued at about $1.4 billion, emphasizing the substantial nature of the assets involved.
Expedited sale motion and legal claims
Genesis has also filed a separate motion to expedite the sale process by shortening relevant deadlines. The objective is to hear the sale motion at the bankruptcy court’s upcoming session on Thursday, February 8. This urgency suggests a proactive approach by Genesis to streamline its financial restructuring.
The GBTC shares, initially part of collateral transferred to Gemini through its Gemini Earn program, are at the center of this motion. Additionally, Genesis is seeking legal entitlement to 31,180,804 additional shares valued at approximately $1.2 billion. These shares pledged to Gemini but never transferred remain a subject of unresolved ownership before the court.
Genesis’s response to SEC and financial settlement
Genesis has agreed to pay a $21 million fine to the SEC, settling a lawsuit related to the operation of the Gemini Earn program, Cryptopolitan reported. This financial settlement, contingent on remaining funds post-bankruptcy, indicates Genesis’s commitment to resolving legal issues and adhering to regulatory requirements.
Responding to the filing, Gemini acknowledged the motion’s significance, calling it an “important step forward” following the approval of GBTC as an exchange-traded product on January 10. This acknowledgment underlines the potential impact of the asset sale on industry dynamics.
Overall, Genesis Global Capital’s move to seek authorization to sell trust assets, including substantial GBTC shares, reflects the company’s proactive stance in addressing its financial challenges. The expedited sale motion and legal claims underscore the urgency of Genesis’s approach to restructuring.
