Bankruptcy Judge Approves Genesis Global's Liquidation of $1.3B in Grayscale Shares
Summary:
Genesis Global Holdco has secured the approval of a bankruptcy judge to liquidate approximately $1.3 billion worth of Grayscale Bitcoin Trust shares, a move aimed at repaying investors. Genesis also plans to convert Grayscale's GBTC into a Bitcoin exchange-traded fund and redeem shares in cash, facilitated by recent approval from the U.S. Securities and Exchange Commission.
In a recent development, Genesis Global Holdco has received consent from a bankruptcy judge to sell Grayscale Bitcoin Trust (GBTC) shares, approximately valued at $1.3 billion, in order to pay back its investors. In a virtual hearing held on February 14 in the United States District Court for the Southern District of New York, Judge Sean Lane gave Genesis the green light to divest itself of a portion of its Grayscale investment. Court records from earlier in the month indicated that Genesis had approximately $1.6 billion in GBTC, Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG) shares. As per the bankruptcy filings, Genesis disclosed it owned close to 35 million GBTC shares and 11 million ETHE and ETCG shares. Grayscale lodged a limited objection to the asset liquidation plan on February 9, acknowledging that the sales would require their written consent but assured it had no intent to hinder the sale or transfer of assets by the debtors.
In a related matter, a group of Genesis creditors have questioned the repayment plan proposed by the Digital Currency Group. On January 10, the U.S. Securities and Exchange Commission (SEC) greenlit the conversion of Grayscale’s GBTC into a spot Bitcoin (BTC) exchange-traded fund, earmarked for listing and trading on U.S. exchanges, along with products from 10 other asset managers. Genesis stated that this approval from the SEC would pave the way for share redemptions in cash. On January 31, Genesis agreed to a $21 million settlement with the SEC concerning allegations relating to the selling of unregistered securities via the Gemini Earn program. It’s worthy to note that Genesis is an entirely independent entity from Genesis Global Trading, which experienced an enforcement action initiated by the New York Department of Financial Services in January.
Published At
2/15/2024 12:59:49 AM
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