Bankrupt crypto lender Genesis has added a huge amount of Bitcoin (BTC) to its arsenal. The move appears to be in line with the firm’s preparation toward paying off its debts with creditors.
A Bloomberg report recently detailed how the firm sold off about 36 million shares of Grayscale Bitcoin Trust (GBTC) to be able to purchase the BTC.
Recall that Genesis had earlier requested permission to sell its GBTC shares from the U.S. bankruptcy court on February 2. At the time of request, however, a share was valued at $38.50. The share price has since gained approximately 50%. Therefore, as of the time of sale, the GBTC shares were valued at $58.50, meaning that Genesis made over $2.1 billion from the sale.
With the said amount, the firm was able to purchase 32,041 Bitcoin when the asset was selling at $65,685 per coin.
Bankruptcy Plan of Crypto Lender Genesis Remains Airtight
Genesis filed for Chapter 11 bankruptcy in the Southern District of New York in January 2023. Since then, the firm has continued to work tirelessly on recovery, but most importantly, to offset all its debts.
Therefore, it’s safe to say that its latest sell-off and Bitcoin acquisition is also an effort in that direction.
Also, recall that Digital Currency Group (DCG) recently claimed that Genesis plans to refund its customers more than the amount they are legally entitled to. The group argued that the current plan of its subsidiary company exceeds the full amount documented in the customers’ petition by hundreds of millions of dollars, while Genesis countered with claims that DCG is trying to take a cut from customers’ repayment.
Whatever the case might be, it appears that Genesis is keen on repaying its lenders. However, from the look of things, the bankrupt firm may be planning to do so by any means necessary.
Skeptical Views
Meanwhile, there are concerns within the community that such significant sell-offs as Genesis recently did may impact the broader crypto market. These fears, while they may be legitimate, Coinbase has recently assured that there will be no such thing. The cryptocurrency exchange wrote in a recent statement:
“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’s view borders on the facts of the rules of Genesis’ bankruptcy plan. According to the rules, Genesis may either convert shares of the GBTC into the underlying Bitcoin asset on behalf of the creditors or outrightly sell the shares outright and distribute the cash.
At the time of publication, the 32,041 Bitcoin recently acquired is now worth $2.18 billion.