US Judge Sanctions Request By Genesis To Sell Its Shares

Genesis, a bankrupt digital asset lending firm, has been granted permission to sell shares valued at $1.6 billion, as it endeavors to undergo restructuring and reimburse its creditors. United States Bankruptcy Judge Sean Lane sanctioned the request by Genesis during a court session in White Plains, New York. Notably, the insolvent firm has been authorized to leverage its investments in Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust.

DCG Cautions Genesis

It is worth noting that Genesis holds approximately $1.3 billion in GBTC shares and $207 million in Ethereum trust shares. Interestingly, the firm informed the court of the necessity to offload these shares to evade paying $1.9 million in monthly fees associated with its trust agreements.

However, Genesis has yet to attain approval for its comprehensive bankruptcy plan in court. According to a statement by Digital Currency Group (DCG), the parent company of the insolvent lender, creditors have not yet endorsed the restructuring proposal, which proposes Genesis winding down its operations and repaying creditors in either cash or cryptocurrency. DCG cautioned that if Genesis fails to secure approval for its bankruptcy plan, the sale of Grayscale shares might be untimely.

Troubles Continue

The price of Bitcoin recently surged above $52,000 for the first time in two years, while Ethereum is hovering around $2,800, according to CoinGecko. It appears that Genesis intends to capitalize on the uptick in prices and exploit the gains.

In addition, Genesis and Gemini, a popular crypto exchange established by the Winklevoss twins, are embroiled in a legal dispute over the custody of the $1.3 billion GBTC shares. The exchange asserts that Genesis lacks rightful ownership of the shares because they were utilized as collateral for loans obtained through the Gemini Earn program.