
In the latest twist of the crypto world’s ongoing saga, bankrupt crypto lender Genesis has petitioned a U.S. judge for permission to sell off a substantial $1.6 billion worth of bitcoin (BTC), ether (ETH), and ethereum classic (ETC) holdings held within Grayscale’s trust products. This move, if approved, could introduce significant selling pressure into the already turbulent cryptocurrency market.
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- Genesis seeks approval to sell $1.6 billion crypto holdings amid bankruptcy proceedings.
- The move could inject significant selling pressure into the volatile cryptocurrency market.
- Stakeholders await the outcome as Genesis navigates a complex bankruptcy situation.
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Genesis Seeks Approval to Offload $1.6 Billion Crypto Holdings Amid Bankruptcy Proceedings
Previously, Genesis had approximately $1.4 billion of its assets tied up in the Grayscale Bitcoin Trust (GBTC), which has recently undergone a transition into a spot exchange-traded fund (ETF). Additionally, Genesis holds approximately $165 million in Grayscale Ethereum Trust and $38 million in Grayscale Ethereum Classic Trust.
According to court documents, Genesis had utilized some of its GBTC shares as collateral within Gemini’s Earn program, a crypto exchange. Furthermore, Genesis is now seeking to reclaim 31 million GBTC shares pledged to Gemini but not yet transferred.
The bankruptcy filing of Genesis comes amidst broader turmoil within Digital Currency Group’s crypto empire, in which Genesis and Grayscale played significant roles. The fallout from losses and controversies in 2022 led to Genesis declaring bankruptcy last year, impacting various stakeholders.
Gemini, as Genesis’ largest creditor, estimates that over 100,000 of its users are affected by the bankruptcy, collectively owed sums ranging between $1 billion to $10 billion. Additionally, Genesis owes substantial amounts to its top 50 creditors, including Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund, totaling over $3.5 billion.
With the motion to liquidate large amounts of cryptocurrencies advancing, the stakeholders watch it tightly, understanding what is to happen to the entire crypto market.
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