Crypto lender Genesis Global Capital, currently navigating bankruptcy proceedings, has petitioned the U.S. Bankruptcy Court in the Southern District of New York for approval to sell trust assets valued at approximately $1.6 billion.

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• Crypto lender Genesis, in bankruptcy proceedings, requests court permission to sell trust assets valued at $1.6 billion, including $1.4 billion in GBTC shares.
• Gemini recognizes Genesis’ filing as a significant advancement, particularly following GBTC’s approval as an exchange-traded product (ETP).
• Bankrupt FTX aims to sell its 8% stake in AI startup Anthropic Holdings, potentially worth $1.4 billion, seeking court approval for the sale.

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Genesis Global Capital Seeks Court Approval for $1.4 Billion GBTC Share Sale Amid Bankruptcy Proceedings

In a motion filed, Genesis, a subsidiary of the Digital Currency Group, seeks permission to liquidate assets, including shares of Grayscale Bitcoin Trust (GBTC) valued at around $1.4 billion, Grayscale Ethereum Trust shares worth about $165 million, and shares of Grayscale Ethereum Classic Trust valued at approximately $38 million.

Expedited Hearing Request

Simultaneously, Genesis has urged the court to expedite relevant deadlines, intending to have the sale motion heard at the upcoming hearing scheduled for Thursday, February 8.

The GBTC shares in question were initially pledged as collateral by Genesis to Gemini for the Gemini Earn program. Additionally, Genesis is pursuing legal ownership of 31,180,804 additional shares, valued at around $1.2 billion, pledged to Gemini but not transferred, a matter currently under court consideration.

Positive Step Forward Acknowledged by Gemini

Gemini, in a statement on its website, views the filing as a significant advancement, particularly following the approval of GBTC as an exchange-traded product (ETP) on January 10th.

This week, Genesis resolved a lawsuit with the U.S. Securities and Exchange Commission (SEC), agreeing to pay a $21 million fine using remaining funds after the bankruptcy process. The settlement addresses the SEC’s claims related to the operation of the Gemini Earn program.

Benefits of SEC Settlement for GGC

The settlement holds several advantages for Genesis Global Capital’s estates, including the resolution of the SEC’s Civil Action Claim filed in these Chapter 11 Cases. It enables Genesis to eliminate the risks, expenses, and uncertainty associated with prolonged litigation against the SEC.

The SEC’s lawsuit, filed in January 2023, focused on the period between February 2021 and November 2022, alleging violations of U.S. securities laws by both Genesis and Gemini through their crypto lending program. The legal proceedings prompted Genesis to suspend withdrawals in November 2022 and subsequently file for bankruptcy in January 2023.

FTX Seeks Approval for Stake Sale in AI Startup

In a related development, bankrupt cryptocurrency exchange FTX is seeking court approval to sell its 8% stake in AI startup Anthropic Holdings. The motion, filed by FTX’s CEO John Ray III, proposes two possible procedures for the sale – an auction or a private sale.

Anthropic Holdings, valued at up to $18 billion in December 2023, could potentially make FTX’s 7.84% stake worth approximately $1.4 billion. FTX aims to use the proceeds to fully repay all customer and creditor claims arising from the collapse.

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