Home Crypto News Genesis Buys $2.1 Billion of Bitcoin

Genesis Buys $2.1 Billion of Bitcoin

08 Apr, 2024 Crypto News

Genesis Buys $2.1 Billion of Bitcoin

The insolvent cryptocurrency lending entity Genesis is said to have sold roughly 36 million shares from the Grayscale Bitcoin Trust (GBTC) to secure more Bitcoin, aiming to address its obligations to creditors.

A recent Bloomberg article revealed that on April 2, Genesis disposed of about 36 million shares of GBTC, which were worth around $58.50 each at the time.

Since Genesis received approval from a bankruptcy court in the United States to offload the 36 million shares of GBTC on Feb. 2, when each share was valued at $38.50, the share price has seen a roughly 50% increase.

The proceeds from the sale, totaling $2.1 billion, enabled the acquisition of 32,041 Bitcoin at a rate of $65,685 each on April 2. Genesis intends to utilize this Bitcoin to further its debt repayment endeavors.

As of the latest update, the 32,041 Bitcoin holds a value of $2.18 billion.

Coinbase, a leading cryptocurrency exchange, recently communicated to the public that it does not anticipate the massive sell-off to significantly affect the broader cryptocurrency 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 mentioned.

It was noted that the bankruptcy plan's guidelines permitted Genesis to either convert the GBTC shares directly into Bitcoin for the benefit of the creditors or to sell the shares and distribute the proceeds.

This news emerges amidst claims by the Digital Currency Group (DCG) that its subsidiary, Genesis, is offering to repay its customers more than what they are rightfully owed.

On Feb. 6, Cointelegraph reported DCG's assertion that the proposed repayment plan by Genesis would end up allocating “hundreds of millions of dollars more than the full amount of their petition date claims” to the creditors.

Genesis declared bankruptcy under Chapter 11 in January 2023.

Sources:

https://cointelegraph.com/news/genesis-crypto-lender-bankrupt-bitcoin-purchase-grayscale-gbtc

https://news.bloomberglaw.com/bankruptcy-law/bankrupt-genesis-sold-gbtc-shares-to-acquire-32-041-bitcoin

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