Crypto lender Genesis Global Capital, currently navigating bankruptcy proceedings, has submitted a motion to the U.S. Bankruptcy Court, seeking authorization for the sale of approximately $1.6 billion in trust assets. Among these assets are shares in Grayscale Bitcoin Trust (GBTC), amounting to about $1.4 billion. The assets also include shares in Grayscale Ethereum Trust valued at around $165 million and Grayscale Ethereum Classic Trust shares worth approximately $38 million, according to news report by The Block.
The filing reveals that Genesis, a subsidiary of Digital Currency Group, has made a separate motion to expedite the relevant deadlines. This move aims to have the sale motion addressed at the bankruptcy court's upcoming hearing scheduled for Thursday, February 8.
The GBTC shares in question constituted the initial collateral transferred to Gemini as part of the Gemini Earn program. Additionally, some shares were acquired through the bankruptcy of Three Arrows Capital. Genesis is also seeking legal claim to 31,180,804 additional shares, valued at about $1.2 billion, which were pledged to Gemini but not transferred. Ownership of these shares is currently an unsettled matter before the court.
Gemini, responding to the filing, called it an important step forward following the approval of GBTC as an exchange-traded product (ETP) on January 10th.
In a related development, Genesis recently agreed to pay a $21 million fine to the SEC. This settlement arises from a lawsuit filed by the SEC against the company concerning its operation of the Gemini Earn program.
The bankruptcy proceedings and asset sales highlight the challenges faced by crypto-focused financial entities, emphasizing the complexities surrounding the industry's regulatory landscape.