Genesis Global Holdco LLC has received approval from the bankruptcy court to initiate the redemption of approximately 35 million Grayscale Bitcoin Trust (GBTC) shares, totaling over $1.3 billion.
Judge Sean Lane, presiding over the case, announced the decision on Wednesday, granting Genesis the authority to convert the shares into either Bitcoin or cash. This redemption process, stated the crypto lender, will be executed gradually over time with the assistance of a broker. Additionally, Genesis intends to sell more than 11 million shares from two Grayscale Ethereum Trusts, valued at over $200 million, as outlined in a court filing dated February 2.
Sean O’Neal, representing Genesis, disclosed that the current valuation of the Grayscale shares stands at approximately $1.6 billion.
However, Genesis’ parent company, Digital Currency Group, attempted to postpone the redemptions until the bankruptcy court determines the fate of its subsidiary’s debt repayment plan later this month. Although not opposing the sale of shares, Digital Currency Group expressed concerns about potential premature redemptions if the court rejects the repayment plan.
Jeffrey Saferstein, representing Digital Currency Group, highlighted concerns regarding the rapid unloading of Grayscale shares, which could adversely impact prices and minimize potential recoveries for Genesis creditors. The parent company also sought the right to provide consultation on the sale of Grayscale shares.
Despite these objections, Judge Lane affirmed Genesis’ autonomy in determining the sale of its assets, emphasizing that redemptions would be conducted strategically with the guidance of a broker to prevent undue market pressure. Moreover, the proposed sale garnered widespread support from Genesis creditors.
As Genesis moves forward with its redemption plans, stakeholders closely monitor developments in the cryptocurrency market amidst this pivotal phase of bankruptcy proceedings.
