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Genesis Converts GBTC Shares into Bitcoin
Bankrupt crypto lending firm Genesis has converted approximately 36 million shares of Grayscale Bitcoin Trust (GBTC) into Bitcoin as part of preparations to settle its debts with creditors.
Genesis’s GBTC Share Liquidation
According to a recent report by Bloomberg, the company liquidated the GBTC shares on April 2, at a value of around $58.50 per share at that time. The share price of GBTC has surged by approximately 50% since Genesis initially sought permission from the U.S. bankruptcy court to sell the shares.
Back on February 2, when the shares were priced at $38.50, Genesis began the process of offloading the GBTC shares.
Bitcoin Acquisition
The total amount generated from the sale amounted to $2.1 billion, enabling Genesis to acquire 32,041 Bitcoin on April 2, at a price of $65,685 per Bitcoin. These acquired Bitcoins will be used by Genesis to fulfill its obligations towards creditors.
As of the time of writing, the 32,041 Bitcoin holds a value of approximately $2.18 billion.
Market Impact and Reassurance
In response to concerns about the potential impact of this large sell-off on the crypto market, cryptocurrency exchange Coinbase reassured the community that the funds are likely to remain within the crypto ecosystem, having a neutral overall effect on the market.
Coinbase explained that the bankruptcy plan allows Genesis to either convert GBTC shares into Bitcoin assets on behalf of the creditors or sell the shares outright and distribute the cash.
Legal Proceedings and Settlements
In a bankruptcy court filing last month, Genesis announced that it had reached a settlement agreement with the SEC, agreeing to pay $21 million to resolve the civil lawsuit.
More recently, a federal judge ruled that the SEC’s lawsuit against crypto firms Gemini and Genesis will proceed in court. The judge’s decision came after Gemini and Genesis attempted to have the lawsuit, which alleges the sale of unregistered securities through the Gemini Earn program, dismissed.
In a 32-page order, New York District Court Judge Edgardo Ramos rejected the motions to dismiss filed by Gemini and Genesis, stating that the SEC’s allegations were plausible enough to continue with the legal proceedings.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
