Bankrupt Genesis Seeks Court Approval to Sell Billions in Crypto

Once a leading crypto lender, Genesis, which filed for bankruptcy, has most recently filed a motion before a US judge to approve the sale of over $1.6 billion worth of Bitcoin, Ethereum, and Ethereum Classic stuck in Grayscale trust products. 

As per market observers, if the firm secures the approval of overselling, then significant volatility in the price of Bitcoin and Ethereum is expected. It is crucial to note that the firm of jailed Sam Bankman Fried, FTX, has sold over $1 Billion of GBTC holdings. 

In case the court approves, several other tokens and coins are expected to decline, and a significant gap in the market capitalization of the crypto market is observed. 

Around $1.4 Billion assets owned by Genesis are held in Grayscale Bitcoin Trust (GBTC), Which has since converted to become a spot ETF. The firm also holds $165 Million in Grayscale Ethereum Trust and $38 Million in Grayscale Ethereum Classic, the filing says. 

In the past few quarters, the race to secure approval for Bitcoin spot ETF has stirred the market, resulting in several giants’ exit from the market. However, analysts claim the recent approval of the ETF is fully backed by political and internal pressure. 

A significant chunk of GBTC shares were transferred to a centralized cryptocurrency exchange, Gemini, backed by Genesis. In the past few years, the series of unprecedented collapses continued, and the biggest among them are FTX and Celsius. 

In January 2024, Genesis Global Trading settled with New York financial regulators over allegations of failing to retain proper anti-money laundering (AML) safeguards. Genesis will pay an $8 million fine and discontinue operations in the state as part of the agreement.

New York State Department of Financial Services (DFS) Superintendent Adrienne A. Harris announced the settlement. According to a DFS statement, Genesis disobeyed multiple state banking laws concerning maintaining an effective AML and Office of Foreign Assets Control (OFAC) compliance program.

Crypto Market Performance Post Major Bankruptcy  

The market movement post-collapse of FTX, TerraLUNA, Celsius, and Genesis is widely discussed, and severe volatility is observed following the demise of these firms. 

FTX filed for bankruptcy in November 2023, and between 9 and 12 November, Bitcoin was trading below $28k. 

Despite dozens of destructive events, Bitcoin bounced back to higher levels, and when writing, it was trading at $43,430 with a weekly growth of 3.38%, and intraday, its trading volume grew 14.71%. 

No specific movement is seen in the market capitalization of the entire crypto market, and when writing, it was $1.66 Trillion.

Disclaimer

The views and opinions stated by the author or any people named in this article are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss. 

With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.