Genesis Global Capital, a bankrupt cryptocurrency lender, has filed a petition with the U.S. Bankruptcy Court in the Southern District of New York. The company is seeking authorization to sell approximately $1.6 billion in trust assets.
Assets held by Genesis, a subsidiary of Digital Currency Group, include Grayscale Bitcoin Trust (GBTC) shares worth approximately $1.4 billion. The assets also include shares of Grayscale Ethereum Trust and Grayscale Ethereum Classic Trust worth approximately $165 million and $38 million, respectively.
In order to expedite the process, Genesis submitted a separate request to shorten the relevant deadlines. This move aims to ensure that the sale request will be considered at the bankruptcy court’s next hearing on Thursday, February 8.
The GBTC shares in question constituted the first collateral transferred by Genesis to Gemini. This was part of Gemini’s Earn program, along with some shares acquired through the bankruptcy of Three Arrows Capital. Genesis also has a legal claim for an additional 31,180,804 shares (worth approximately $1.2 billion) that were pledged to Gemini but never transferred. Ownership of these shares is currently a matter of dispute in court.
In a statement on its website, Gemini called the application “an important step forward.” This move follows the approval of Grayscale Bitcoin Trust (GBTC) as an exchange-traded product (ETP) on January 10.
Earlier this week, Genesis agreed to pay a $21 million penalty to the U.S. Securities and Exchange Commission (SEC). This settlement will be paid from funds remaining after the bankruptcy and is intended to resolve a lawsuit the agency filed against the company for operating the Gemini Earn program.
*This is not investment advice.