In a recent court hearing held in White Plains, New York, U.S. Bankruptcy Judge Sean Lane granted approval for Genesis Global to sell approximately 35 million shares of Grayscale Bitcoin Trust (GBTC) worth an estimated $1.3 billion. This decision allows Genesis to monetize its holdings in GBTC, as well as in Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG). Despite objections from its parent company, Digital Currency Group (DCG), Judge Lane ruled in favor of Genesis, emphasizing the company’s expertise in cryptocurrency and its ability to maximize the value of its shares.
Genesis Global’s Asset Monetization Plan
Genesis Global’s plan involves not only selling the 35 million shares of GBTC, but also over 11 million shares in two Grayscale Ethereum Trusts, valued at more than $200 million. This strategic sale is expected to result in a total of approximately $1.6 billion in shares of GBTC, ETHE, and ETCG combined. However, DCG expressed concerns about the premature sale, fearing that it could depress prices and minimize potential recoveries for Genesis creditors. They also sought the right to provide input on the sale process.
Despite DCG’s objections, Judge Lane asserted Genesis’s right to determine the strategic sale of its assets. He emphasized that the sales would be conducted gradually with the assistance of a broker to avoid any adverse effects on prices. Judge Lane justified his decision by acknowledging the expertise of Genesis and its creditors in the crypto market, suggesting their ability to maximize the value of the Grayscale shares.
Apart from the asset monetization plan, Genesis is also proceeding with its liquidation plan. This plan involves shutting down the company and repaying customers in either cash or cryptocurrency, depending on the nature of their deposits. Earlier this month, Genesis reached settlements with the U.S. Securities and Exchange Commission (SEC) and New York Attorney General Letitia James, addressing their objections to the bankruptcy plan. Under the terms of the settlements, the SEC will receive a $21 million fine if Genesis has surplus funds after repaying customers. Any additional funds recovered from the bankruptcy proceedings will be used to support creditors allegedly defrauded by Genesis, as directed by the New York Attorney General.
The approval granted by U.S. Bankruptcy Judge Sean Lane for Genesis Global to sell over $1.3 billion worth of Grayscale Bitcoin Trust shares marks a significant development in the company’s asset monetization plan. Despite objections from its parent company, Digital Currency Group, Judge Lane ruled in favor of Genesis, acknowledging their expertise in the crypto market. As Genesis proceeds with its liquidation plan, these strategic sales of GBTC, ETHE, and ETCG shares will play a crucial role in repaying customers and addressing the concerns of creditors.
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