In a strategic move to address its financial obligations, the insolvent cryptocurrency lending entity Genesis reportedly disposed of roughly 36 million shares in the Grayscale Bitcoin Trust (GBTC), aiming to bolster its Bitcoin holdings to facilitate debt settlements with its creditors.
A Bloomberg article recently highlighted this significant transaction, noting the liquidation of these shares on April 2, which at the time were valued at around $58.50 each.
This disposal came after a notable increase in share value, approximately 50% since Genesis sought approval from a bankruptcy court in the United States to sell the GBTC shares on February 2, when their price stood at $38.50.
The aggregate sales proceeds amounted to $2.1 billion, enabling Genesis to acquire 32,041 Bitcoin at a price point of $65,685 each on the same day.
The firm intends to utilize this Bitcoin cache in its ongoing efforts to repay its creditors.
At the time this information was disclosed, the acquired Bitcoin stash was valued at $2.18 billion.
In light of these developments, Coinbase, a leading cryptocurrency exchange, reassured the market that this substantial sell-off was unlikely to destabilize the broader crypto market.
“Our view is that much of these funds will likely remain within the crypto ecosystem, contributing to a neutral overall effect in the market,” Coinbase remarked.
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They elaborated that the bankruptcy plan’s provisions permitted Genesis to either directly convert the GBTC shares into Bitcoin for creditors or sell the shares and distribute the proceeds in cash.
This move follows assertions from the Digital Currency Group (DCG), which contended that its subsidiary, Genesis, had proposed compensating its customers beyond what they were actually entitled to.
Cointelegraph, on February 6, reported DCG’s statement that Genesis’s proposed plan would result in lenders receiving “hundreds of millions of dollars more than the full amount of their petition date claims.”
Genesis’s strategic financial maneuvering comes after its Chapter 11 bankruptcy filing in January 2023, marking a critical phase in its efforts to stabilize its operations and fulfill its financial commitments to creditors.
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