Genesis Receives Court Approval to Sell $1.6 Billion Worth of Grayscale GBTC Shares

Grayscale’s GBTC, a popular investment vehicle for Bitcoin, may experience new sell pressure and outflows following a recent ruling in the Genesis bankruptcy case on Feb. 14.

Genesis is a cryptocurrency firm that has received court approval to liquidate its approximately 35 million Grayscale Bitcoin Trust (GBTC) shares. This move allows the crypto firm to sell its holdings, which are valued at around $1.3 billion.

After months of legal proceedings, the U.S. Bankruptcy Court in the Southern District of New York dismissed the litigation and granted Genesis the authority to proceed with the sale.

While Winklevoss’s Gemini may not have achieved the desired outcome, this development signifies a significant advancement for Genesis. It presents them with an opportunity to fulfill their obligations towards creditors.

Also Read: Cathie Wood of Ark Invest Raises Concerns about ETFs Beyond BTC and ETH

Genesis Resolves Lawsuits: A Positive Outcome for All Involved

Gemini previously implemented an earning scheme that allowed investors to lend their assets to Genesis through a three-party agreement to provide a broader context. Under this arrangement, investors would receive their promised profit at the end of the agreed-upon timeframe. Genesis utilized the funds by extending additional loans to well-established businesses.

As per the terms of the Genesis-Gemini deal, Gemini Earn owners were promised 60 million GBTC shares. However, Genesis failed to fulfill its commitment by withholding earnings from participants in the earning scheme. Consequently, Gemini took action to recover the GBTC shares that were originally designated as collateral for Genesis.

Also Read: Ethereum Breaks Key Resistance: Is ETH Poised to Reach $3,000?

In October 2023, Gemini took legal action against Genesis, their former corporate partner, regarding the GBTC shares. This lawsuit is related to the situation where investors in the Earn program were affected by the suspension of withdrawals on the Genesis exchange in 2022. Gemini has assured that the claims of these investors will be fully compensated with the GBTC shares.

Gemini, a leading cryptocurrency exchange, strongly advocated for the court to make a decisive ruling on the control of GBTC shares. According to Gemini, Genesis should no longer have authority over these shares, and they should not be used to repay any of Genesis’ creditors involved in its ongoing bankruptcy proceedings.