- Bankruptcy judge approved Genesis to sell $1.6 billion worth of shares in Grayscale trusts.
- Genesis told the court that it needed to sell these shares to avoid paying $1.9 million in monthly fees on its trust agreements.
- The firm has $1.3 billion in GBTC and $207 million in the Ethereum trust.
Genesis, a bankrupt digital asset lending firm, has been allowed to sell $1.6 billion worth of Grayscale’s Bitcoin and Ethereum shares, as it aims to undergo restructuring and repay the creditors.
According to a report from Reuters, Genesis Global received approval from United States Bankruptcy Judge Sean Lane on Wednesday during a court hearing in White Plains, New York. Notably, the bankrupt firm has been greenlit to capitalize on its investment in Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust.
It is important to note that Genesis holds around $1.3 billion in GBTC shares, followed by $207 million in the Ethereum trust. Interestingly, the firm told the court that it needed to sell these shares to avoid paying $1.9 million in monthly fees on its trust agreements.
On the other hand, Genesis has yet to secure a victory in court for its overall bankruptcy plan. As per a statement from Digital Currency Group (DCG), the parent firm of the bankrupt lender, creditors have yet to get on board with the restructuring plan, which would see Genesis winding down operations and repaying creditors in cash or crypto.
As per Reuters, DCG warned that if Genesis fails to acquire approval for its bankruptcy plan, the sale of the Grayscale shares might be premature.
Additionally, the price of Bitcoin broke above $52,000 for the first time in two years, while Ethereum is almost touching $2,800 as of 10:22 p.m. ET on Wednesday, as per CoinMarketCap. It seems that Genesis seeks to take advantage of the surge in prices and capitalize on the gains.
Further, Genesis and crypto exchange Gemini, founded by the Winklevoss twins, are currently engaged in a lawsuit over the custody of the $1.3 billion GBTC shares. The exchange claims that Genesis doesn’t have any right to the shares because they were used as collateral for loans taken via the Gemini Earn program.
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