Genesis, a cryptocurrency lending firm facing bankruptcy, has filed for permission from a US bankruptcy court to sell its shares in the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).
Genesis has invested around $1.4 billion in GBTC, now a spot ETF, and holds $165 million and $38 million in ETHE and ETCG, respectively. The changing values of the cryptocurrencies involved emphasize the need for rapid action. Bitcoin (BTC), Ether (ETH), and Ethereum Classic (ETC), with current values at $43,121, $2,322, and $24.95, respectively, according to CoinMarketCap.
Genesis had previously used some GBTC shares as collateral with Gemini in the Gemini Earn program. The firm seeks to reclaim an additional 31 million GBTC shares pledged to Gemini but not yet transferred.
This legal action unfolds against the backdrop of the broader challenges the Digital Currency Group’s crypto empire faces, including Genesis and Grayscale. The sector was significantly impacted by losses and controversies in 2022, leading to Genesis’ bankruptcy declaration.
As Genesis’ primary creditor, Gemini impacts over 100,000 users with debts between $1 billion and $10 billion due to the bankruptcy. Moreover, FTX, another bankrupt crypto exchange, sold its 22 million GBTC shares for nearly $1 billion.
Genesis has committed in its court filings to maximizing creditor returns by collaboratively working with Gemini to achieve the highest market value for their trust assets and GBTC shares.
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