According to the announcement from the bankrupt cryptocurrency company Genesis, they have completed the conversion process from GBTC to Bitcoin, with the amount of Bitcoin recovered reaching 32,000.
The bankrupt crypto lending firm Genesis has converted approximately 36 million shares of the Grayscale Bitcoin Trust (GBTC) into Bitcoin as part of its preparations to settle debts with creditors.
According to a recent Bloomberg report, the company liquidated the GBTC shares on April 2, at a value of around $58.50 per share at that time. Notably, the GBTC share price 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.
The total amount generated from the sale was $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.
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.
The move follows Digital Currency Group’s claim that its subsidiary company, Genesis, has proposed to pay its customers more than their actual entitlements.
Genesis Settles with the SEC
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. According to the SEC’s lawsuit, Gemini Earn had approximately 340,000 customers and $900 million in assets under management as of November 2022.
Following FTX’s bankruptcy in the same month, Genesis temporarily suspended Gemini Earn withdrawals, citing “unprecedented market turmoil” and liquidity issues. Genesis filed for bankruptcy after the SEC’s lawsuit was filed in January of the previous year.
In February, Gemini agreed to return $1.1 billion to Gemini Earn customers through the Genesis bankruptcy proceeding, as part of a settlement with New York’s financial regulator.
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. The judge rejected the motions to dismiss, stating that the SEC’s allegations were plausible enough to continue with the legal proceedings.