Key Takeaways
- Genesis liquidated its holdings in GBTC and utilized the funds to acquire 32,041 bitcoins
- In February, Genesis was granted authorization by a New York bankruptcy court to sell approximately 36 million shares in GBTC.
Genesis, a crypto lending firm, has completed the liquidation of its Grayscale Bitcoin Trust (GBTC) shares after securing permission from the U.S. bankruptcy court. The company announced that it successfully monetized all 36 million GBTC shares, valued at around $2.1 billion, on April 2.
The decision to sell the GBTC shares was made as part of Genesis’s efforts to settle its debts with creditors, following its bankruptcy filing in January 2023 amidst legal challenges from the Securities and Exchange Commission (SEC).
Genesis revealed that it utilized the proceeds from the GBTC shares liquidation to purchase approximately 32,041 bitcoins, which will be distributed to its customers. The acquisition was made at a price of $65,685 per bitcoin on April 2. This move comes after the firm was granted approval by the bankruptcy court to offload its Grayscale cryptocurrency trust shares, amounting to $1.6 billion.
Following Genesis’s initial request to the U.S. bankruptcy court on February 2 to sell 36 million GBTC shares at $38.50 each, the share price surged by around 50%. This allowed for a total sale amount of $2.1 billion, which was then used to purchase 32,041 Bitcoin on April 2 at a price of $65,685 per Bitcoin.
In late February, Gemini reached a settlement in principle with Genesis. Under the terms of the settlement, Gemini agreed to distribute $1.8 billion to affected users of Genesis’s Earn service. This decision came after withdrawals from the Earn service were halted in November 2022, prompting a lawsuit from users.
The settlement aims to reimburse affected users with digital assets, with the total value surpassing the initial $1.1 billion due to asset appreciation since the suspension of withdrawals. In January 2023, Genesis declared bankruptcy, following a lawsuit by the SEC accusing the company of selling illegal securities.
