- The crypto firm is approved to sell its around $1.3B worth of GBTC after months of litigation.
- It is a major step forward for Genesis as it gives them a chance to pay their creditors.
Genesis, a defunct cryptocurrency firm, has been given the go light by a court to sell off its approx. 35 million Grayscale Bitcoin Trust (GBTC) shares. The crypto firm is now approved to sell its around $1.3 billion worth of GBTC after months of litigation were ultimately dismissed by the U.S. Bankruptcy Court in the Southern District of New York.
Although this is not the outcome that Winklevoss’s Gemini had hoped for, it is a major step forward for Genesis as it gives them a chance to pay their creditors.
Ongoing Saga
To put things in perspective, Gemini used to operate an earning scheme that let investors systematically lend their assets to Genesis via a three-party agreement. At the conclusion of the agreed upon time, these investors would get their promised profit. The money was put to use by Genesis by means of further loans to prominent businesses.
In accordance with the terms of the Genesis-Gemini deal, the owners of Gemini Earn were guaranteed 60 million GBTC shares. Genesis eventually broke its own commitment by not paying out earnings to those who had put money into the earning scheme. Therefore, Gemini attempted to seize the GBTC that were intended for Genesis’ collateral.
Following this, in October 2023, Gemini filed a lawsuit against Genesis, its previous corporate partner, involving the same GBTC shares. Investors in the Earn program who were impacted when Genesis exchange ceased withdrawals on its platform in 2022 will have their claims fully covered by the GBTC shares, according to Gemini.
Gemini urged that the court rule that Genesis no longer controls the GBTC shares, and therefore they should not be utilized to reimburse any of Genesis’ creditors listed in its bankruptcy proceedings.
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