Bankrupt crypto financier Genesis filed a motion Friday asking a U.S. judge to approve the sale of more than $1.6 billion in Bitcoin. (Bitcoin),ether (Ethereum) and Ethereum Classic (etc) Held in Grayscale’s trust product.
If this motion is approved, the market could see even more selling pressure on Bitcoin. Exchange FTX went bankrupt in January sold over $1 billion worth GBTC holdings. This coincided with a price drop from $49,000 to $39,000.
Nearly $1.4 billion of Genesis’ assets were held in the Grayscale Bitcoin Trust (GBTC), which was later converted to a spot exchange-traded fund (ETF). The company also owns $165 million in Grayscale Ethereum Trust and $38 million in Grayscale Ethereum Classic Trust, according to filings.
Some of the GBTC shares were transferred as collateral by Genesis to cryptocurrency exchange Gemini as part of the Gemini Earn program, the filing states. Genesis is seeking to acquire an additional 31 million GBTC shares that were promised to Gemini but not transferred, the filing added.
Genesis and Grayscale were a key part of Digital Currency Group’s cryptocurrency empire, but the collapse of prominent funds and exchanges in 2022 triggered a domino effect that led to Genesis declaring bankruptcy last year. As a result, the group suffered losses and controversy.
Genesis’ largest creditor is Gemini, which estimates that more than 100,000 of its users have been affected by the bankruptcy, with total debts ranging from $1 billion to $10 billion.
The company also owes more than $3.5 billion to its top 50 creditors, including trading giants Cumberland, Mirana, Moon Alpha Finance and VanEck’s New Finance Income Fund.
