Genesis Global has been approved by the bankruptcy court to sell around 35 million shares of Grayscale bitcoin Trust, worth an estimated $1.3 billion. US Bankruptcy Judge Sean Lane made the decision during a court hearing in White Plains, New York.
This approval authorizes Genesis to monetize its holdings of the Grayscale bitcoin Trust, Grayscale ethereum Trust, and Grayscale ethereum Classic Trust.
Genesis will sell its GBTC shares
In addition to $1.3 billion in GBTC shares, Genesis intends to sell more than 11 million shares in two Grayscale ethereum Trusts, with a combined value of more than $200 million, as detailed in court. presentation dated February 2.
This will result in a total of approximately $1.6 billion of shares in Grayscale bitcoin Trust (GBTC), Grayscale ethereum Trust (ETHE), and Grayscale ethereum Classic Trust (ETCG) combined.
However, Genesis' parent company, Digital Currency Group, sought to delay the proposed sale until the bankruptcy court rules on the subsidiary's debt repayment plan, which is scheduled for later this month. DCG expressed concern that premature sales of shares in Grayscale could depress prices, minimizing potential recoveries for Genesis creditors.
Jeffrey Saferstein, representing DCG, also highlighted the need for careful consideration to avoid a rapid dumping of shares. Additionally, DCG sought the right to request information regarding the sale of Grayscale shares.
Despite these objections, Judge Sean Lane ruled in favor of Genesis, affirming the company's right to determine the strategic sale of its assets. He stressed that sales would be made over time with the help of a broker to avoid a rapid dumping of shares, which could negatively affect prices.
Lane justified his decision by highlighting the “considerable experience” of Genesis and its creditors in crypto, suggesting that they are well equipped to maximize the value of Grayscale shares.
Agreement between the SEC and the New York Attorney General
Meanwhile, Genesis is moving forward with its liquidation plan, which involves closing the company and refunding customers in cash or cryptocurrency, depending on the nature of their deposits.
The company reached agreements with the US SEC and New York Attorney General Letitia James earlier this month, resolving their objections to its bankruptcy plan.
Under the terms of the agreements, the SEC will be fined $21 million if Genesis has excess funds after paying customers. Additionally, the New York Attorney General will use all funds recovered from the bankruptcy proceedings to assist creditors allegedly defrauded by Genesis.
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