A bankruptcy judge has approved Genesis Global Holdco’s request to liquidate approximately $1.3 billion worth of Grayscale Bitcoin Trust (GBTC) shares as part of its efforts to reimburse investors.
In a virtual hearing held on February 14 in the United States District Court for the Southern District of New York, Judge Sean Lane authorized Genesis to proceed with the sale of a portion of its holdings in Grayscale. Court documents from February revealed that Genesis held approximately $1.6 billion worth of shares in GBTC, Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).
Genesis disclosed in its bankruptcy filings that it possessed around 35 million GBTC shares and 11 million shares of both ETHE and ETCG. Grayscale submitted a limited objection to the liquidation plan on February 9, asserting that any sales required written approval from the investment firm. However, Grayscale clarified that it did not intend to obstruct or delay Genesis’s efforts to sell or transfer trust assets.
Following the approval by the U.S. Securities and Exchange Commission (SEC) on January 10, Grayscale’s GBTC is slated to transition into a spot Bitcoin (BTC) exchange-traded fund (ETF), enabling listing and trading on U.S. exchanges. Genesis anticipates that this approval will streamline the redemption of shares for cash.
On January 31, Genesis reached a $21 million settlement with the SEC regarding its alleged involvement in offering and selling unregistered securities through the Gemini Earn program. Notably, Genesis Global Holdco is distinct from Genesis Global Trading, which faced regulatory enforcement action from the New York Department of Financial Services in January.
These developments underscore the evolving regulatory landscape surrounding cryptocurrency investments and highlight efforts by entities like Genesis Global Holdco to navigate complex legal challenges while addressing investor concerns.
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