Genesis purchases $2.1B of Bitcoin following GBTC sell-off

Avatar


Bankrupt crypto lending firm Genesis reportedly offloaded about 36 million shares of Grayscale Bitcoin Trust (GBTC) to acquire additional Bitcoin (BTC) as part of its preparations to settle its debts with creditors.

According to a recent Bloomberg report, Genesis liquidated approximately 36 million GBTC shares on April 2, valued at approximately $58.50 per share at that time.

The share price has climbed by approximately 50% since Genesis initially sought permission from the U.S. bankruptcy court to sell the 36 million GBTC shares on Feb. 2, when the shares were at $38.50.

The total sale amount came to $2.1 billion which allowed the purchase of 32,041 Bitcoin 3 on April 2, at the price of $65,685. Genesis will use the Bitcoin to continue its efforts repaying creditors.

At the time of publication, the 32,041 Bitcoin is currently worth $2.18 billion. 

Just recently, cryptocurrency exchange Coinbase provided assurance to the community that the sell-off was not expected to have a wider impact on the crypto 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 stated.

It explained that the rules of the bankruptcy plan allowed Genesis to either convert shares of the GBTC into the underlying Bitcoin asset on behalf of the creditors or sell the shares outright and distribute the cash.

Related: Gemini mulled forming a ‘juggernaut’ with Genesis before it went to smoke

This comes after Digital Currency Group argued that its subsidiary company Genesis has proposed to pay its customers more than they are actually entitled to.

On Feb 6, Cointelegraph reported DCG claims that Genesis current plan would see “hundreds of millions of dollars more than the full amount of their petition date claims” go to lenders.

It was just over a year ago, in January 2023, when Genesis filed for Chapter 11 bankruptcy in the Southern District of New York.

Magazine: Ethereum’s ERC-20 design flaws are a crypto scammer’s best friend