If the motion is approved, the market could see yet another significant chunk of selling pressure on bitcoin. In January, bankrupt exchange FTX sold over $1 billion worth of GBTC holdings. That coincided with the price dropping to $39,000 from $49,000.
Nearly $1.4 billion of Genesis’ assets were held in Grayscale Bitcoin Trust (GBTC), which has since converted to become a spot exchange-traded fund (ETF). It also holds $165 million in Grayscale Ethereum Trust and $38 million in Grayscale Ethereum Classic Trust, the filing shows.
Some of the GBTC shares were transferred to the crypto exchange Gemini by Genesis as collateral as part of the Gemini Earn program, the filing stated. Genesis seeks an additional 31 million GBTC shares that were pledged to Gemini but never transferred, the filing added.
Genesis and Grayscale made up key parts of Digital Currency Group’s crypto empire, which was hit by losses and controversies as prominent funds and exchanges went bust in 2022, sparking a domino effect that caused Genesis to declare bankruptcy last year.
Genesis’ biggest creditor is Gemini, which estimates that more than 100,000 of its users are affected by the bankruptcy and are owed a total of between $1 billion and $10 billion.
The lender further owes over $3.5 billion to its top 50 creditors, which also include trading giant Cumberland, Mirana, MoonAlpha Finance and VanEck’s New Finance Income Fund.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.