Genesis Seeks Approval to Sell $1.6B of Trust Assets Amid Bankruptcy

Bankrupt crypto lending firm Genesis has filed a motion with the United States Bankruptcy Court in the Southern District of New York to liquidate assets held in its Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), totaling approximately $1.6 billion. Genesis Global Capital, which is facing bankruptcy, is seeking approval to sell these assets to pay off its debts.

Genesis seeks approval to sell $1.6B trust assets. The scene could depict a financial institution with a sign reading "Bankrupt crypto lender" and a stack of assets

Genesis has been one of the leading crypto lending firms until recently when the company faced a liquidity crisis that forced it to file for bankruptcy. The company has been struggling to pay its creditors, and the sale of its trust assets is seen as a way to raise funds to pay off its debts.

The sale of trust assets by Genesis is expected to have a significant impact on the cryptocurrency market. The company’s assets are held in some of the most popular cryptocurrency trusts, and the sale of these assets could lead to a drop in the value of cryptocurrencies such as Bitcoin and Ethereum. However, the impact of the sale on the market remains to be seen.

Key Takeaways

  • Genesis has filed a motion to liquidate assets held in its Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), totaling approximately $1.6 billion.
  • The sale of trust assets is expected to help Genesis pay off its debts.
  • The sale of these assets could lead to a drop in the value of cryptocurrencies such as Bitcoin and Ethereum.

Genesis Bankruptcy Overview

Genesis Bankruptcy: Assets sale sought, $1.6B. No human subjects

Reasons for Genesis Bankruptcy Crypto

Genesis Global Holdco LLC, the lending unit of crypto firm Genesis, filed for bankruptcy protection in January 2024. The company owed creditors at least $3.4 billion after being toppled by a market rout along with regulatory charges by the US Securities and Exchange Commission (SEC).

The company’s bankruptcy filing came amid a broader crackdown by regulators on the cryptocurrency industry. The SEC had accused Genesis of illegally selling crypto through its now-terminated Gemini Earn program, leading to a civil lawsuit against the firm.

Impact on Crypto Market

The bankruptcy filing by Genesis has sent shockwaves through the cryptocurrency market, with investors and analysts closely monitoring the situation. The company’s liquidation of shares in the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) could have a significant impact on the market.

The sale of $1.6 billion worth of trust assets by Genesis could lead to a drop in prices for Bitcoin and Ethereum, as well as other cryptocurrencies. The market is already volatile, and the news of the bankruptcy filing could further exacerbate the situation.

Legal Proceedings

Genesis has requested permission from the US Bankruptcy Court to liquidate its shares in the Grayscale Bitcoin Trust and Grayscale Ethereum Trust. The company’s motion is currently under review by the court, and a decision is expected soon.

The SEC’s civil lawsuit against Genesis is also ongoing, with the company having recently settled the case. The terms of the settlement are not yet known, but it is expected to have a significant impact on the company’s future operations.

In conclusion, the bankruptcy filing by Genesis has raised concerns about the stability of the cryptocurrency market. The liquidation of trust assets could lead to a further drop in prices. And the ongoing legal proceedings against the company could have a significant impact on its future operations.

Asset Sale Strategy

Genesis seeks approval to sell $1.6B trust assets. Bankrupt crypto lender's asset sale strategy in action

Details of the $1.6B Trust Assets

Bankrupt crypto lender Genesis has sought approval to liquidate approximately $1.6 billion of trust assets. Including the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG). These assets will be sold to pay off the company’s creditors.

Sale Approval Process

Genesis has filed a motion in the U.S. Bankruptcy Court seeking authorization to sell the trust assets. The court will review the motion and decide whether to approve the sale. If approved, Genesis will be able to sell the assets to potential buyers.

Potential Buyers and Market Interest

It is unclear who the potential buyers of the trust assets will be. However, there is likely to be significant interest in the assets from investors who are bullish on cryptocurrencies. The sale of the trust assets could also have an impact on the broader crypto market. As it would represent a significant liquidation of crypto assets.

Overall, Genesis’ asset sale strategy is focused on selling off its trust assets to pay off its creditors. The company will need to navigate the bankruptcy court process. And find potential buyers for the assets in order to successfully execute its strategy.

By Jastra Kranjec

Jastra is an author at CryptoPresales. Over the years, she has worked in different fields of journalism and public relations, including politics, economy, crypto, and financial markets.