The sale will provide a significant injection of liquidity to Genesis, which has been grappling with financial complexities.

Genesis Global has received approval from a bankruptcy court to sell approximately 35 million shares of Grayscale Bitcoin Trust (GBTC) worth more than $1.3 billion, Bloomberg reported on Feb. 14.

The decision, made by Judge Sean Lane, allows Genesis to liquidate its GBTC shares into bitcoin or cash. The sale will inject a significant amount of liquidity into Genesis, which has been grappling with financial complexities.

Additionally, Genesis will sell more than 11 million shares in two Grayscale Ethereum Trust funds, further bolstering its assets to more than $200 million.

Genesis, a subsidiary of Digital Currency Group (DCG), has faced significant headwinds following the collapse of several major players in the cryptocurrency space. The company’s decision to halt user withdrawals following the collapse of FTX highlighted the liquidity crunch that has plagued many cryptocurrency companies during the harsh “crypto winter.”

The court’s approval is a critical step for Genesis to navigate the bankruptcy process and stabilize its finances.

DCG fails to delay sale

The ruling comes at a critical time for Genesis’ parent company’s broader financial strategy and restructuring efforts.

DCG and Grayscale are opposing the sale, with the former seeking to delay it until a final decision is reached on a proposed debt repayment plan. There are concerns that if the court rejects the repayment strategy, it may be too early to proceed with the sale.

Nonetheless, the court’s ruling provides a path forward for Genesis and DCG as they navigate their ongoing financial realignment.

The move follows the successful transition of Grayscale’s flagship GBTC fund into a spot Bitcoin ETF, which has seen its value shrunk significantly, losing more than $6 billion, despite leading in trading volume since its launch last month.

SEC, NYAG Settlement

In addition to the liquidation, Genesis recently agreed to a $21 million settlement with the U.S. Securities and Exchange Commission (SEC) over charges related to its Gemini Earn program.

Genesis also settled a lawsuit filed by New York Attorney General Letitia James related to the Earn program, resolving allegations that Genesis defrauded investors through its Earn program. As part of the settlement, Genesis agreed to cease doing business in New York.

Additionally, Genesis was recently fined $8 million by the New York State Department of Financial Services (DFS) for failures to comply with DFS virtual currency and cybersecurity regulations. These failures left the company vulnerable to illegal activity and cybersecurity threats. #Genesis  #股票出售