Genesis Seeks Approval to Sell $1.6 Billion in Trust Asset

Genesis Global Capital, a crypto lender facing bankruptcy threats, has filed a petition with the U.S. Bankruptcy Court for the Southern District of New York, seeking permission to sell approximately $1.6 billion in trust assets. This move is part of the company’s efforts to address its financial challenges and resolve legal issues.

The assets in question, held by Genesis, a subsidiary of the Digital Currency Group, include significant stakes in Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust. The GBTC shares alone are valued at around $1.4 billion, highlighting the substantial nature of the assets involved.

Accelerated sale motion and legal claims Genesis has also filed a separate motion to expedite the sale process by shortening relevant timelines. The goal is to have the sale motion heard at the next bankruptcy court session on Thursday, February 8. This urgency suggests a proactive approach by Genesis to streamline its financial restructuring.

The GBTC shares, initially part of the collateral transferred to Gemini through its Gemini Earn program, are at the center of this move. Additionally, Genesis is seeking legal rights to an additional 31,180,804 shares valued at approximately $1.2 billion. These shares, pledged to Gemini but never transferred, remain an unresolved ownership matter before the court.

Genesis’ response to the SEC and financial settlement Genesis has agreed to pay a $21 million fine to the SEC, settling a lawsuit related to the operation of the Gemini Earn program. This financial settlement, contingent on remaining funds after bankruptcy, demonstrates Genesis’ commitment to resolving legal issues and complying with regulatory requirements.

In response to the filing, Gemini has acknowledged the significance of the motion, describing it as a “significant step forward” following the approval of GBTC as an exchange-traded product on January 10. This acknowledgment underscores the potential impact of asset sales on the industry’s dynamics.

Overall, Genesis Global Capital’s decision to seek permission to sell trust assets, including substantial GBTC shares, reflects the company’s proactive stance in addressing its financial challenges. The accelerated sale motion and legal claims highlight the urgency of Genesis’ approach to restructuring.

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