Bankrupt Genesis Sells GBTC Shares to Settle Debts, Acquires More Bitcoin
Summary:
Genesis, a bankrupt cryptocurrency lending firm, reportedly sold around 36 million shares of Grayscale Bitcoin Trust (GBTC) to secure additional Bitcoin (BTC) for settling debts with creditors. The firm had made $2.1 billion from the sale, which facilitated the purchase of 32,041 Bitcoin units. The decision has implications on the wider cryptocurrency market, but exchange Coinbase anticipates a neutral overall effect, expecting these funds to remain within the crypto ecosystem.
Bankrupt digital currency lending company Genesis has reportedly sold approximately 36 million shares of Grayscale Bitcoin Trust (GBTC) in a move to amass more Bitcoin (BTC) for its debt-settlement plans with creditors. As stated by a recent Bloomberg article, Genesis had liquidated roughly 36 million GBTC shares on April 2nd, each valued at around $58.50 during that period. Since Genesis first obtained approval from a US bankruptcy court to get rid of the 36 million GBTC shares on Feb 2nd, when each share was worth $38.50, there has been about a 50% increase in share price. With the total sale sum rounding up to $2.1 billion, Genesis was able to acquire 32,041 Bitcoin 3 units on April 2nd, each priced at $65,685. These will be used by Genesis in further endeavors to remunerate its creditors. As of the writing of this report, the 32,041 Bitcoins are worth $2.18 billion. On another note, cryptocurrency exchange Coinbase has recently reassured the public that this sell-off is not likely to have a substantial effect on the wider cryptocurrency market. Coinbase's standpoint is that the majority of these funds will probably stay within the cryptocurrency ecosystem, creating a neutral overall market effect. The bankruptcy plan rules allowed Genesis the option to either exchange GBTC shares for the primary Bitcoin asset on their creditors' behalf or sell the shares in full and distribute the profits. This development follows Digital Currency Group's dispute over its subsidiary Genesis's proposal to pay their clients beyond what they are rightly owed. On Feb 6th, it was reported by Cointelegraph that DCG claimed Genesis’s current plan would overpay the lenders by hundreds of millions of dollars, exceeding their claim amounts as of the petition date. Genesis had filed for Chapter 11 bankruptcy in the Southern District of New York in January 2023, just over a year ago. On a side note, there have been reports about the design flaws in Ethereum’s ERC-20 creating an ideal opportunity for crypto scam artists.
Published At
4/6/2024 6:52:29 AM
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