Genesis Global Granted Judicial Consent for 1.6 Billion Dollars Grayscale Shares Sale

Crypto News- A judge has given Genesis Global Trading, a bankrupt lender, the green light to unload its shares of the Grayscale Investments spot Bitcoin exchange-traded fund (ETF), known as GBTC. This permission, granted on Wednesday, paves the way for Genesis to sell off its shares without restrictions on quantity or timeframe.

Under the court’s ruling, Genesis can convert these shares into Bitcoin (BTC) or cash and can work with a broker to manage the sales process. However, the judge denied a request from the parent company, Digital Currency Group (DCG), to provide input on the sale. While acknowledging DCG’s interests, Judge Sean Lane expressed concerns about potential conflicts of interest, stating that the company couldn’t offer impartial advice.

Genesis Global Granted Judicial Consent for 1.6 Billion Dollars Grayscale Shares Sale

A lawyer representing Genesis confirmed that the company’s Grayscale shares are currently valued at $1.6 billion. The holdings include 35 million GBTC shares, 8 million shares of Grayscale’s Ethereum Trust (ETHE), and $3 million worth of the Grayscale Ethereum Classic Trust (ETCG), as per a February filing.

DCG, meanwhile, seeks to postpone the sale until the court approves a debt repayment plan. While not opposing the sale outright, DCG worries that proceeding prematurely could complicate the debt repayment process.

Genesis initiated the motion to sell its shares earlier this month at the United States Bankruptcy Court for the Southern District of New York. The company’s financial troubles stemmed from the collapse of FTX and Alameda Research in 2022, leading to its Chapter 11 bankruptcy protection filing last January.

Genesis Global Granted Approval to Offload Grayscale Shares Amid Bankruptcy Proceedings: A Legal Saga Unfolds

In addition to its bankruptcy woes, Genesis faced legal scrutiny from regulatory bodies. In February, the company settled with the United States Securities and Exchange Commission (SEC) for $21 million over the sale of unregistered securities in the Gemini Earn program. Earlier in January, Genesis settled with the New York Department of Financial Services (NYDFS) for compliance failures, violating virtual currency and cybersecurity regulations.

Genesis also filed a lawsuit against the Gemini crypto exchange for over $689 million last November, alleging detrimental withdrawals prior to its bankruptcy filing. Reports indicate that Gemini moved substantial funds from the Earn program to its liquidity reserve in September, exacerbating Genesis’ financial strain.