Genesis Global Capital has formally requested authorization from the U.S. Bankruptcy Court for the Southern District of New York to proceed with an extensive sale of its holdings.

The crypto lender, currently undergoing bankruptcy proceedings, submitted the new motion seeking approval to sell trust assets valued at approximately $1.6 billion.

Genesis Seeks Court Approval for Liquidation

As per a court filing on February 2, the trust assets comprise approximately $1.4 billion in Grayscale Bitcoin Trust shares, as well as $200 million in shares of Grayscale’s Ethereum and Ethereum Classic trusts.

Genesis Global Capital and its debtor-affiliates have formally highlighted that selling GBTC shares is crucial in optimizing estate value and effectively managing their assets.

The urgency of this request is evident, as the bankrupt crypto lender has simultaneously sought an expedited proceeding, aiming to synchronize it with the court’s scheduled hearing on February 8.

Genesis’ resolution to liquidate these assets is a strategic move stemming from its previous involvement in the cryptocurrency lending sector, including collateral transferred to Gemini through the Gemini Earn program and the acquisition of assets resulting from the bankruptcy of Three Arrows Capital.

The ongoing sale also aims to amplify efforts to legally reclaim 31,180,804 additional GBTC shares, valued at around $1.2 billion, initially pledged to Gemini but still pending a court decision on ownership.

Genesis Resolves SEC Lawsuit

Last week, Genesis reached an agreement to pay $21 million to the U.S. Securities and Exchange Commission (SEC) as a resolution to a lawsuit submitted by the regulator a week before the firm filed for bankruptcy protection.

The SEC’s allegations centered around the assertion that Gemini and Genesis had offered unregistered securities through the Gemini Earn program.

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