Genesis, a bankrupt crypto lending firm, has asked the permission of the United States Bankruptcy Court in the Southern District of New York to proceed with the sale of assets held in its Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).
As per the filing, the assets are worth a whopping $1.6 billion, and it is a possibility that the price of the assets underlying the trust might fluctuate if the court grants the approval. Genesis also highlighted the urgency of proceeding with the sale for the firm to exit bankruptcy.
Genesis Plans $1.6B Sale
Genesis asked for the bankruptcy’s court’s approval ahead of any potential fluctuations in the prices of the underlying assets—Bitcoin (BTC), Ethereum (ETH), and Ethereum Classic (ETC). These coins have witnessed a significant price increase in the past few months.
Maximizing Capital for Creditors
Genesis stated in the filing that it seeks to maximize the capital for creditors for faster repayment and a quicker exit from bankruptcy.
“The Debtors believe it would be beneficial to have the authority to sell and liquidate the Trust Assets to reduce any risk that fluctuations in price might have on the Debtors’ estates and to facilitate distributions to creditors,” read the filing.
Gemini Lawsuit Against Genesis Over Assets
The Grayscale Bitcoin Trust (GBTC), which was recently converted to a spot Bitcoin exchange-traded fund (ETF) after approval from the SEC, holds around 3.2% of all circulating Bitcoin. Notably, the GBTC shares make up approximately 87% of Genesis’ total shares across the three trusts, with a value of $1.38 billion.
As reported earlier by TheCoinRise, the crypto exchange founded by the Winklevoss twins, Gemini, filed a lawsuit against Genesis, stating that the bankrupt firm does not have any rights to GBTC shares that were used as collateral for loans taken by its users via the Gemini Earn program.
Both Gemini and Genesis are in need of the GBTC funds for the exchange and are making efforts to ensure that users of the Earn product are able to redeem their funds. Meanwhile, the bankrupt firm is looking to get out of bankruptcy via the sale of the shares.
Celsius Exits from Bankruptcy
Prominent crypto lending platform Celsius has officially exited bankruptcy and is all set to return over $3 billion in crypto and fiat to its users. The firm also announced the creation of a new Bitcoin mining company managed by crypto mining firm Hut 8 called Ionic Digital, Inc.