A New York bankruptcy judge has granted Genesis Global Holdco permission to liquidate roughly $1.3 billion worth of Grayscale Bitcoin Trust (GBTC) shares to compensate investors.
A New York bankruptcy judge has granted Genesis Global Holdco permission to liquidate roughly $1.3 billion worth of Grayscale Bitcoin Trust (GBTC) shares to compensate investors. This decision, made during a virtual hearing on Feb. 14, marks a significant development in the ongoing saga surrounding Genesis' bankruptcy proceedings.
Genesis, facing financial difficulties, filed for bankruptcy protection in November 2022 amidst a brutal bear market. As part of its restructuring efforts, the company sought to sell a portion of its holdings, including the aforementioned GBTC shares. Judge Sean Lane's approval allows this process to move forward.
Court filings indicate that Genesis previously held roughly $1.6 billion worth of shares in GBTC, Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG). Notably, Grayscale itself raised limited objections to the GBTC sale, emphasizing written approval requirements but confirming no intention to obstruct the process.
This decision comes amidst heightened scrutiny of Grayscale products like GBTC, which hold underlying crypto assets but aren't directly redeemable. In January, the SEC approved the conversion of GBTC to a spot Bitcoin ETF, potentially enabling future cash redemptions. However, this remains subject to regulatory hurdles.
Adding another layer of complexity, Genesis recently settled with the SEC regarding unregistered securities offerings through the Gemini Earn program. It's important to note that this action pertains to Genesis Global Trading, a separate entity from Genesis Global Holdco.
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