Genesis Sells GBTC Shares Worth IDR 24.9 Trillion
JAKARTA - Genesis, a crypto loan-giving company that is experiencing bankruptcy, has obtained permission from a judge to sell its shares on the Grayscale Bitcoin Trust (GBTC). GBTC is an investment product that tracks the price of Bitcoin (BTC). This decision allows Genesis to pay back part of its debt to creditors by selling billions of dollars worth of crypto assets.
Judge Sean Lane of the US Bankruptcy Court for the Southern District of New York approved the movement proposed by Genesis on Wednesday, February 2, 2024. The movement allowed Genesis to sell around US$1.3 billion (Rp 20.3 trillion) of GBTC shares, as well as its shares in the Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Classic Trust (ETCG), each valued at US$200 million (Rp 3.1 trillion) and US$ 3 million (Rp 46.8 billion).
Genesis owns a total of 35 million shares of GBTC, eight million ETHE shares, and 300 thousand ETCG shares, according to court documents filed in early February. With GBTC's share price of around 46 US dollars (IDR 717,900) per share at the time of publishing this news, Genesis shares in Grayscale amounted to around 1.6 billion US dollars (IDR 24.9 trillion).
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Genesis can sell the shares at their own discretion, indefinitely. Judge Lane also added that Genesis could exchange the shares into Bitcoin or cash, if desired.
Judge Lane rejected requests from the Digital Currency Group (DCG), the parent company of Grayscale and Genesis, to engage in the process of selling the shares. Judge Lane said that DCG was not in an ideal position to provide advice that was not affected by its own interests. However, he also does not blame DCG for trying to protect his own interests.
Genesis, founded in 2013, is one of the oldest and largest crypto loan-giving companies in the world. The company offers loans, trades, and custodial services for crypto assets to institutional and retail customers. However, in 2023, Genesis experienced financial difficulties due to the decline in the crypto market and lawsuits from regulators.
In November 2023, Genesis filed for bankruptcy Chapter 11, which allowed the company to continue operating while restructuring its debt. Genesis owes around USD 2.4 billion (IDR 37.4 trillion) to more than 4,000 creditors, including DCG, which is the largest creditor with a claim of USD 1.1 billion (IDR 17.1 trillion).
DCG, founded in 2015, is one of the world's leading crypto investment companies, with portfolios that include Coinbase, Kraken, BitGo, Blockstream, Chainalysis, and others. Apart from being the owner of Grayscale and Genesis, DCG also owns CoinDesk, a crypto media outlet.