- Genesis Global Capital files for bankruptcy and seeks approval to sell its $1.6B holdings in GBTC, ETHE, and ETCG trusts to repay creditors
- Genesis’ holdings account for large portions of outstanding Bitcoin (32%), Ethereum (25%), and Ethereum Classic (85%)
- Genesis aims to quickly liquidate assets before potential price drops to maximize funds available for distribution to creditors
The crypto lending firm Genesis Global Capital has filed for bankruptcy and is now urgently seeking court approval to liquidate its substantial holdings in Grayscale’s Bitcoin, Ethereum, and Ethereum Classic Trusts. This comes as the latest blow in the unraveling of the crypto industry amidst the recent market turmoil.
Genesis’ Crypto Holdings
Genesis currently holds around $1.6 billion worth of shares in the GBTC, ETHE, and ETCG trusts. GBTC makes up the vast majority at $1.38 billion, followed by ETHE at $169 million and ETCG at $38 million. As of late 2022, these trusts accounted for 32% of all circulating Bitcoin, 25% of Ethereum, and 85% of Ethereum Classic.
Seeking Approval for Asset Liquidation
In their bankruptcy filing, Genesis stressed the need to liquidate their holdings in the trusts as soon as possible. They aim to sell the assets before potential price fluctuations which could further impact the value of the trusts. The recent conversion of GBTC to a Bitcoin spot ETF now allows shares to be redeemed for cash, which Genesis hopes to take advantage of.
Maximizing Creditor Repayment
Genesis states that liquidating the trust assets is critical to “maximize the funds available for distribution to creditors.” Both Genesis and its parent company Gemini have pledged to use best efforts to optimize sale prices. Despite the collapse of its lending business, Genesis still holds a sizable crypto portfolio, which it now aims to sell off to repay creditors.
The bankruptcy of Genesis underscores the fragility of crypto markets. Its pending asset liquidation may put further pressure on already declining token prices. The crypto downturn continues to engulf major industry players.
