Crypto News– In an effort to responsibly conclude the bankruptcy proceedings, Genesis Global Capital LLC, backed by Digital Currency Group, has submitted a motion seeking approval for the sale of estate shares in Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), totaling approximately $1.6 billion. As outlined in the court filing directed to the United States Bankruptcy Court for the Southern District of New York on February 2, the debtors, including Genesis Asia Pacific, possess 35,939,233 GBTC shares valued at roughly $1.38 billion.
Genesis Global, a defunct cryptocurrency lending platform
Furthermore, the debtors hold 8,717,520 ETHE shares, valued at approximately $169.9 million, and 2,970,892 ETCG shares, valued at around $38 million. The motion states that the debtors seek permission to sell and liquidate the trust assets to mitigate associated volatility risks. However, it also mentions that the debtors are open to receiving in-kind compensation, with cash settlement being utilized where feasible.
“The Committee, the Ad Hoc Group, and Gemini have indicated their support for this motion, albeit with the condition that Gemini’s endorsement is contingent upon the debtor’s assurance that this motion remains impartial regarding the parties’ disagreement concerning the initial GBTC shares and the additional GBTC shares,” the motion stated.
Challenges Confronting Genesis Global
The challenges for Genesis Global heightened following the collapse of FTX and Alameda Research in late 2022. Despite efforts to negotiate with creditors outside of court, a resolution wasn’t achieved, leading the company to file for Chapter 11 bankruptcy protection in the United States in January of the following year. It’s worth mentioning that both Genesis Global and Gemini Trust Company faced charges from the United States Securities and Exchange Commission (SEC) for the sale of unregistered securities. However, Genesis Global opted to settle the case with the SEC, agreeing to pay a $21 million fine to avoid further financial repercussions.