#Genesis Global has received approval from the bankruptcy court to sell approximately 35 million shares of Grayscale Bitcoin Trust ( GBTC ), worth more than $1.3 billion.
Ruling From Judge Sean Lane on Genesis
Judge Sean Lane allows Genesis to convert its GBTC shares into Bitcoin or cash. This share sale is expected to inject a large amount of cash into Genesis. This helps the company overcome financial complications.
Genesis plans to sell more than 11 million shares in two Grayscale Ethereum Funds. They continued to increase their assets by more than $200 million.
As a subsidiary of Digital Currency Group (DCG), Genesis has faced many difficulties following the collapse of several large organizations in the industry. The decision to suspend user withdrawals following the FTX incident highlights the liquidity shortage many crypto companies face during a harsh “crypto winter.”
The court approval marks an important step forward for Genesis. The company will be able to navigate through the bankruptcy process and stabilize its finances.
DCG Cannot Postpone Sale
The ruling comes at a critical time for Genesis in the context of the parent company's financial strategy and broader restructuring efforts.
DCG and Grayscale objected to the sale. Genesis' parent company sought a postponement until a final decision on a debt repayment plan is made.
However, the court's ruling opens a path forward for Genesis and DCG.
The move comes after Grayscale's flagship GBTC fund was converted into a bitcoin spot ETF.
Settlement with SEC and NYAG
In addition to the asset liquidation, Genesis recently agreed to a $21 million settlement with the Securities and Exchange Commission (SEC) related to the alleged Gemini Earn scheme.
Genesis also settled a lawsuit filed by New York Attorney General Letitia James. They have resolved allegations of investor fraud through the program. Genesis agreed to cease doing business in New York as part of the settlement.
Genesis was recently fined $8 million by the New York State Department of Financial Services (DFS) for violations of DFS's virtual currency and cybersecurity regulations.
