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Genesis, a firm that is currently dealing with bankruptcy filings, has recently sold 36 Million shares of the Grayscale Bitcoin Trust (GBTC) to invest directly in Bitcoin as part of its preparations to pay its creditors.
According to a Bloomberg report, Genesis had liquidated approximately thirty-six Million GBTC shares on April 2, 2024. It was trading at the time of the transactions at approximately $58.
The share price has increased by 50% since Genesis initially received permission from a United States bankruptcy court to sell the quantity mentioned on February 2, when the shares were trading at $38.50.
Details Of Transactions
The total sale transaction could be valued at $2.1 Billion which facilitated the purchase of 32,041 Bitcoin on April 2, when BTC was trading at a price of $65,685. Genesis will utilize this investment in Bitcoin to continue its efforts to repay creditors. The total investment in Bitcoin is currently valued at $2.34 Billion.
Coinbase, a popular cryptocurrency exchange Coinbase assured the community that sell-off was not significant or considerable on the crypto market.
Coinbase stated, “Our view is that much of these funds will likely remain within the crypto ecosystem, contributing to a neutral overall effect in the market.”
It explained that the rules of the bankruptcy plan allowed Genesis to convert shares of the GBTC into the underlying Bitcoin asset. It is on behalf of the creditors or they sell the shares outright and distribute the cash. It was developed after the Digital Currency Group (DCG) argued that its subsidiary company, Genesis, had proposed paying its customers more than what they were supposed to.
On February 7, Genesis’s current plan would see “hundreds of millions of dollars more than the full amount of their petition date claims” go to lenders. In January 2023, Genesis filed for Chapter 11 bankruptcy.
Genesis is committed to making repayments to its customers beyond their due payments. This development and steps confirm the assertion by the Digital Currency Group.
Recent Updates From Genesis
Genesis confirmed a settlement agreement with the SEC involving a payment of $21 Million to resolve a civil lawsuit related to its operations. It includes the temporary suspension of withdrawals from Gemini Earn following the bankruptcy of FTX; it cites market turmoil and liquidity challenges.
The financial troubles prevailing in Genesis became more recognizable after the lawsuit of SEC that led to bankruptcy at the beginning of 2023.
In addition to the recent court filing, the SEC’s lawsuit against Gemini and Genesis will proceed with dismissing motions by both companies to dismiss the lawsuit, which involves allegations of selling unregistered securities through the Gemini Earn program.
The legal development underscores the ongoing challenges and regulatory scrutiny the cryptocurrency industry is undergoing.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
