Bankrupt crypto financial company Genesis has filed a lawsuit in U.S. Bankruptcy Court for the Southern District of New York with the Grayscale Bitcoin Trust (GBTC), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Classic Trust. (ETCG) for permission to liquidate its assets. A total of approximately 1.6 billion dollars.
In a recent courtroom filing, Mr. Genesis said it was urgent to obtain approval to sell the trust assets ahead of possible price fluctuations of the underlying assets Bitcoin (BTC), Ethereum (ETH), and Ethereum Classic (ETC). He emphasized that there is. Genesis said the aim is to maximize the funds available for distribution to creditors.
“Debtors may find it beneficial to have the power to sell and liquidate trust assets in order to reduce the risk that price fluctuations pose to the debtor’s assets and to facilitate distribution to creditors.” I believe.”
As of September 2023, GBTC Trust held approximately 3.2% of all Bitcoin in circulation, according to the filing. As of December 2022, ETHE Trust held approximately 2.5% of all Ethereum in circulation, and ETCG Trust held approximately 8.5% of all Ethereum Classic in circulation.
GBTC shares account for approximately 87% of Genesis shares across the three trusts, valued at $1.38 billion.
On the other hand, ETHE Trust accounts for approximately 10% of the total holdings (approximately $169 million), and ETHCG Trust accounts for approximately 3% (total amount of $38 million).
Genesis will now be able to redeem its shares for cash through redemption, with GBTC’s recent conversion into a spot Bitcoin exchange-traded fund (ETF) following U.S. Securities and Exchange Commission (SEC) approval on January 10. He emphasized that it had become. program.
However, the company noted that the ETH Trust does not have a redemption program and would require written consent from the sponsor to sell or dispose of its shares. Genesis requested a waiver of written approval.
Cointelegraph recently reported that since the GBTC conversion, there has been a significant exodus of investors selling GBTC shares.
On January 22, bankrupt cryptocurrency exchange FTX sold 22 million GBTC shares worth nearly $1 billion, completely liquidating its entire holding.
Related: BlackRock and ProShares Bitcoin ETF overtakes GBTC’s daily trading volume
However, Genesis declared that it intends to maximize profits from the sale of crypto assets.
“Both the Debtor and Gemini shall, in good faith, use their reasonable best efforts to maximize the market value of the Trust Assets or Initial GBTC Shares and the proceeds from their sale or redemption. ‘, the application states.
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