Key Points
- Genesis, a bankrupt crypto lending firm, sold 36 million shares of Grayscale Bitcoin Trust (GBTC) to purchase additional Bitcoin (BTC).
- The firm aims to use the Bitcoin to settle its debts with creditors.
Genesis, a crypto lending firm that has filed for bankruptcy, has reportedly sold around 36 million shares of the Grayscale Bitcoin Trust (GBTC).
The sale was conducted to acquire additional Bitcoin (BTC) and is part of the firm's strategy to settle its debts.
Details of the Transaction
As per a recent report, Genesis liquidated the GBTC shares on April 2, which were valued at approximately $58.50 per share at that time.
Since Genesis initially sought permission from the U.S. bankruptcy court to sell the shares on February 2, the share price has increased by approximately 50%.
The total sale yielded $2.1 billion, which was used to purchase 32,041 Bitcoin on April 2, at a price of $65,685 per Bitcoin.
Genesis plans to use the Bitcoin to continue repaying its creditors.
The 32,041 Bitcoin is currently valued at $2.18 billion.
Impact on the Crypto Market
Recently, Coinbase, a cryptocurrency exchange, reassured the community that the sell-off was not expected to have a significant impact on the crypto market.
Coinbase stated that most of these funds would likely remain within the crypto ecosystem, contributing to a neutral overall effect in the market.
The bankruptcy plan rules allowed Genesis to either convert the GBTC shares into Bitcoin on behalf of the creditors or sell the shares outright and distribute the cash.
This development followed after Digital Currency Group argued that Genesis, its subsidiary, has proposed to pay its customers more than they are actually entitled to.
Genesis' current plan would see lenders receiving "hundreds of millions of dollars more than the full amount of their petition date claims".
Genesis filed for Chapter 11 bankruptcy in the Southern District of New York in January 2023.
