Troubled crypto finance company Genesis has reportedly bought $2.1 billion worth of Bitcoin (BTC) after selling about 36 million shares of Grayscale Bitcoin Trust (GBTC). .
According to a Bloomberg Law report citing court documents filed on April 5, Genesis sold 36 million GBTC shares and used the proceeds to buy 32,041 Bitcoins and use them to pay off creditors. I want to.
On February 14, the New York Bankruptcy Court approved the decision to sell GBTC shares along with shares of the Grayscale Ethereum (ETH) Trust. Genesis initially sought permission when its GBTC stock was valued at nearly $1.4 billion.
Similarly, Grayscale Ethereum Trust's stake was valued at $165 million, and Grayscale Ethereum Classic Trust's stake was valued at $38 million.
These valuations have changed significantly due to the recent rise in Bitcoin prices. The current Bitcoin price is around $68,000, and the value of the coins purchased from the GBTC stock proceeds alone is now around $2.2 billion.
The bankrupt crypto lender plans to distribute these coins to Gemini Earn's creditors as part of its repayment strategy. The development follows allegations from Genesys' parent company, Digital Currency Group (DCG), which alleged that DCG would overpay lenders on proposed repayment plans.
The crypto community has had mixed reactions to this move. Cryptocurrency exchange Coinbase reassured that the decline is likely to remain within the crypto ecosystem without major disruption to the market, but the potential impact on GBTC and the broader crypto industry remains strong. Concerns about the impact remain.
Genesis' financial difficulties are due to the suspension of its lending operations due to the bankruptcy of FTX at the end of 2022, forcing it to repay a large amount of locked deposits. That led Genesis to consider a range of options, including hiring investment bank Morris & Co. and announcing 30% job cuts.
The bankruptcy filing affected Genesis and raised questions about the stability of the Grayscale Bitcoin Trust. Market observers were particularly wary of the potential liquidation of more than 600,000 bitcoins related to Genesis' bankruptcy.
Amid these challenges, crypto lenders recently settled a lawsuit with New York State Attorney General Letitia James over claims related to the Earn program. The settlement, pending approval by a bankruptcy judge, is intended to return assets to former Arn customers and other Genesis creditors.
