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Court allows Genesis to sell $1.3 billion worth of GBTC shares to pay off creditors.

The court’s decision is aimed at both protecting customers’ interests and ensuring transparency and fairness in Genesis’ operations.

Date: 2024-02-15 Author: Łukasz Michałek
Court allows Genesis to sell $1.3 billion worth of GBTC shares to pay off creditors.

On Wednesday, Genesis Global received bankruptcy court approval to sell its shares in Grayscale Bitcoin Trust (GBTC).

The bankrupt cryptocurrency lender can now sell its 35 million GBTC shares worth more than $1.3 billion to return money to customers. Judge Sean Lane signed an order allowing debtors to sell the shares at their discretion during a hearing via Zoom on February 14.

The debtors can exchange the shares for cash or Bitcoins with Judge Lane’s approval. In addition, Genesis was given permission to decide whether to sell the assets and work with a broker to carry out the sale process.

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In a filing published on February 2, Genesis said it plans to sell shares of Grayscale Ethereum Trust, Grayscale Ethereum Classic Trust and GBTC shares for $1.6 billion.

Initially, Genesis used GBTC shares as collateral for the Gemini Earn program. Notably, after GBTC was approved as an exchange-traded product(ETP) on January 10, Gemini considered this application a significant advance.

DCG claims that Genesis’ arguments regarding the sale of assets were unfounded.

DCG’s lawyers stated: “Given the uncertainty about the debtors’ revised plan and when distributions to creditors may actually occur, there appears to be no immediate need for the relief requested by the debtors.”

However, Sean O’Neal, a lawyer for Genesis, said that delaying the sale or redemption of the Trust’s assets could benefit both entities due to the high management fees the Trust charges.

O’Neal added: “The debtors’ shares in the underlying assets of the funds(e.g. BTC, ETHE) are losing value due to the above market fees.”

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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