Genesis Global Capital, once a major player in cryptocurrency lending, is taking further steps to tackle its financial issues. The company, which recently filed for bankruptcy, has asked the U.S. Bankruptcy Court in New York to approve the sale of about $1.6 billion in trust assets.
In court documents, Genesis outlined its plan to sell assets from trusts, including shares in popular cryptocurrency investments like Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust. If approved, this sale could provide much-needed funds for Genesis as it deals with its bankruptcy.
This move comes amid legal battles and regulatory scrutiny over Genesis’s operations. The company is currently in a lawsuit with the Securities and Exchange Commission (SEC) regarding its Gemini Earn program, a lending service done with cryptocurrency exchange Gemini. As part of a settlement with the SEC, Genesis has agreed to pay a $21 million fine from any remaining assets after bankruptcy, a significant step in addressing regulatory issues.
The filing also reveals Genesis’s complex relationship with Gemini, with agreements on asset transfers and collateralization. The motion aims to clarify ownership rights over shares pledged to Gemini, adding complexity to the bankruptcy process.
It is worth noting that Gemini has welcomed the filing, seeing it as a positive move forward. In a statement, the exchange highlighted the importance of the motion, especially after recent regulatory approvals like GBTC becoming an exchange-traded product (ETP).
The timing of the filing is significant, with Genesis pushing for quick approval to align with the February 8th bankruptcy court hearing, which shows urgency from the company to address its financial responsibilities and find a solution.
