The insolvent cryptocurrency lending company’s creditors emphasised the urgency of receiving quick approval to sell the shares before any future market swings.
Genesis, a bankrupt cryptocurrency lending company, has asked the US Bankruptcy Court for authorization to sell its about $1.6 billion worth of shares in the Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).
Genesis underlined in a recent court filing how urgent it is to have permission to sell the trust assets in order to avoid any future swings in the prices of the underlying assets, which are Bitcoin, Ethereum, and Ethereum Classic. The goal, according to Genesis, is to maximise the amount of money that can be given to creditors.
“To lessen any risk that market variations would have on the Debtors’ estates and to facilitate distributions to creditors, the Debtors feel it would be helpful to have the right to sell and liquidate the Trust Assets.”
With a value of $1.38 billion, the GBTC shares account for over 87% of Genesis’ entire portfolio across the three trusts. In the meantime, the ETHCG trust makes up around 3% of the overall holdings, or $38 million, and the ETHE Trust accounts for nearly 10%, or $169 million.
The statement states that as of September 2023, the GBTC Trust possessed roughly 3.2% of all Bitcoin in circulation. About 2.5% of all Ethereum was in circulation in December 2022, whereas about 8.5% of all Ethereum Classic was in circulation in the ETCG Trust.
Genesis announced that the recent conversion of GBTC to a spot Bitcoin exchange-traded fund (ETF) has been approved by the US Securities and Exchange Commission (SEC) on January 10. As a result, shares can now be redeemed for cash through Genesis’ redemption programme.
It did point out, nonetheless, that the ETH Trusts lack a redemption programme and that in order to sell or otherwise dispose of the shares, formal permission from the sponsor is required. Genesis asked to have the requirement for written consent waived.