In a motion submitted on recently, bankrupt cryptocurrency lender Genesis requested permission from a U.S. judge to sell more than $1.6 billion in bitcoin (BTC), ether (ETH), and ethereum classic (ETC) that were stored in trust products offered by Grayscale.
The market may witness strong selling pressure on bitcoin if the motion is adopted. FTX, the bankrupt exchange, sold more than $1 billion worth of GBTC in January. At the same time, the price decreased from $49,000 to $39,000.
Grayscale Bitcoin Trust (GBTC), which subsequently changed its status to become a spot exchange-traded fund (ETF), owned nearly $1.4 billion of Genesis’ assets.
According to the document, it also owns $165 million in Grayscale Ethereum Trust and $38 million in Grayscale Ethereum Classic Trust.
According to the filing, Genesis sent some of the GBTC shares to the cryptocurrency exchange Gemini as collateral for the Gemini Earn programme. According to the document, Genesis is requesting an extra 31 million GBTC shares that were pledged to Gemini but were never transferred.
Important pillars of Digital Currency Group’s cryptocurrency empire, Genesis and Grayscale, were struck by losses and controversy when well-known funds and exchanges collapsed in 2022, setting off a chain reaction that led to Genesis’s bankruptcy filing the previous year.
Gemini, Genesis’ largest creditor, believes that around 100,000 of its customers are impacted by the bankruptcy and owe the company a total of $1 billion to $10 billion. In addition, the lender owes its top 50 creditors—which include VanEck’s New Finance Income Fund, trading behemoth Cumberland, Mirana, and MoonAlpha Finance—more than $3.5 billion.