Genesis Global Capital, a cryptocurrency lending company, has filed for bankruptcy in the United States and requested permission from the Bankruptcy Court to liquidate shares of Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), with a total value of approximately $1.6 billion.
In their recent court filing, Genesis emphasized the urgency of obtaining approval for the sale of these entrusted assets to avoid any potential price fluctuations in the underlying assets, which are Bitcoin (BTC), Ether (ETH), and Ethereum Classic (ETC). Genesis stated that their goal is to maximize the funds available for distribution to creditors.
The creditors believe that having the right to sell and liquidate these entrusted assets would mitigate any risks arising from price volatility, ensuring a smoother distribution process to the creditors.
GBTC shares make up around 87% of Genesis’s total investment portfolio in the three trust funds, with a value of $1.38 billion. Meanwhile, ETHE represents approximately 10% of its total holdings, amounting to about $169 million, and ETHCG accounts for roughly 3%, valued at $38 million.
According to the records, as of September 2023, GBTC held approximately 3.2% of the total circulating Bitcoin. In December 2022, ETHE held about 2.5% of the total Ethereum in circulation, and ETCG held roughly 8.5% of the total Ethereum Classic in circulation.
On January 22nd, the bankrupt cryptocurrency exchange FTX sold 22 million GBTC shares, worth nearly $1 billion, liquidating its entire holding. This move marked a significant development in the ongoing situation.