Genesis gets court approval to offload $1.6B Grayscale shares
A lawyer for Genesis put the value of the Grayscale shares around $1.6 billion
Genesis and Adobe Stock modified by Blockworks
A judge on Wednesday granted a motion from Genesis to allow the bankrupt lender to sell its shares of Grayscale’s bitcoin ETF (GBTC).
The motion allows the debtors to begin selling the shares at their discretion, and does not set up a timeline. US bankruptcy judge Sean Lane also overruled a request from Digital Currency Group to consult on the shares.
DCG is “not in an ideal position” to offer “advice untainted by its own interest,” Judge Lane said at the hearing. He added that he didn’t fault DCG for looking out for its own interest, however.
Judge Lane added, as part of his approval, that the debtors can convert the shares to bitcoin or cash. A lawyer for Genesis pegged the value of the Grayscale shares at $1.6 billion.
According to the Wednesday hearing, the bankrupt lender — through Chapter 11 — is able to decide how to sell the assets and can work with a broker to make decisions on the sales.
Genesis filed a motion to sell around $1.3 billion of GBTC, as well as its shares in Grayscale’s Ethereum Trust (ETHE) and Grayscale’s Ethereum Classic Trust (ETCG).
Read more: Genesis wants to sell $1.3B GBTC
According to an early February filing, the bankrupt lender owns 35 million shares of GBTC, eight million shares of ETHE and roughly $3 million of ETCG.
At the time of publication, GBTC traded around $46 a share.
Lawyers representing the debtors said that the timing of the motion came after the Securities and Exchange Commission approved a slew of spot bitcoin ETFs in early January.
Following the initial filing by Genesis, Digital Currency Group filed an objection to the confirmation plan. DCG is the parent company of the brand.
The proposed plan, DCG said, “pays unsecured creditors hundreds of millions of dollars more than the full amount of their petition date claims” and “disproportionately favors a small controlling group of creditors over others.”
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