Genesis Sells 36 Million GBTC Shares to Buy Bitcoin, Aiming to Pay Off Debts Amid Bankruptcy

In a strategic move to address its financial obligations, cryptocurrency lender Genesis reportedly lost about 36 million shares in Grayscale Bitcoin Trust (GBTC), aiming to consolidate its Bitcoin holdings in order to facilitate the repayment of debts and its creditors.

A Bloomberg article recently highlighted this significant activity, noting the liquidation of these shares on April 2, which at the time were worth around $58.50 each.

This offer came after a significant increase in the value of the shares, about 50% since Genesis requested permission from the bankruptcy court in the United States to sell GBTC shares on February 2, when their price reached $ 38.50.

The total proceeds of the sale reached $2.1 billion, enabling Genesis to acquire 32,041 Bitcoins at a price of $65,685 each on the same day.

The company intends to use these Bitcoin reserves in its ongoing efforts to pay its creditors.

When this information was revealed, the found Bitcoin stash was worth $2.18 billion.

In light of these developments, Coinbase, a leading cryptocurrency exchange, assured the market that this massive sale is unlikely to disrupt the broader crypto market.

“Our view is that many of these funds can remain within the crypto ecosystem, contributing to the overall impact of the market,” Coinbase said.

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They explained that the provisions of the bankruptcy plan allowed Genesis to either directly convert GBTC shares into Bitcoin to creditors or sell the shares and distribute the proceeds in cash.

This action follows allegations by the Digital Currency Group (DCG), which claimed that its subsidiary, Genesis, proposed to compensate its customers more than what they were entitled to.

Cointelegraph, on February 6, reported DCG’s statement that the proposed Genesis plan would result in creditors receiving “hundreds of millions of dollars more than the full amount of their claims as of the date of the application.”

Genesis’ strategic financial maneuver comes after it filed for Chapter 11 bankruptcy in January 2023, marking an important step in its efforts to stabilize its operations and meet its financial commitments to creditors.

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