Genesis asks bankruptcy court to approve $1.4 billion sale of GBTC shares

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Bankrupt crypto lender Genesis Global Capital has filed a new motion with the U.S. Bankruptcy Court in the Southern District of New York seeking authorization to sell approximately $1.6 billion in trust assets. 

According to the filing, the assets held by Genesis, a subsidiary of the Digital Currency Group, include shares of Grayscale Bitcoin Trust worth about $1.4 billion, shares of Grayscale Ethereum Trust worth about $165 million, and shares of Grayscale Ethereum Classic Trust worth about $38 million.

The company also filed a separate motion to shorten the relevant deadlines so that the sale motion could be heard at the bankruptcy court’s next hearing on Thursday, February 8. 

The GBTC shares in question made up the initial collateral Genesis transferred to Gemini as part of the latter company’s Gemini Earn program, along with some shares obtained through the bankruptcy of Three Arrows Capital. The company is also seeking to legally claim 31,180,804 additional shares (worth about $1.2 billion) that were pledged to Gemini but never transferred; the ownership of the shares is currently an unsettled matter before the court. 

Gemini, in an announcement on its website, called the filing an “…important step forward following the approval of the Grayscale Bitcoin Trust (GBTC) as an exchange-traded product (ETP) on January 10th.”

Earlier this week, Genesis agreed to pay a $21 million fine to the SEC from whatever funds are left over after the bankruptcy to settle the agency’s lawsuit against the company for operating the Gemini Earn program. 

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