In a bold move to manage its ongoing financial crisis, Genesis Global Capital has approached the U.S. Bankruptcy Court with a proposal to sell a significant portion of its assets, including a vast number of Grayscale Bitcoin Trust shares, in an effort to maximize estate value and stabilize its operations.

Seeking Court Approval

Genesis Global Capital, part of Genesis Global Holdco, has filed a motion with the U.S. Bankruptcy Court for the Southern District of New York to authorize the sale of its trust assets. The assets in question include roughly $1.6 billion worth, with Grayscale Bitcoin Trust (GBTC) shares making up about $1.4 billion of the total.

Maximizing Estate Value

The court filing from February 2 indicates that Genesis and its affiliates consider the sale of these shares to be a crucial step in maximizing the value of the estate. This is seen as an essential move to manage assets efficiently during a period of severe volatility in the cryptocurrency market.

The Urgency of the Motion

With the bankruptcy proceedings ongoing, Genesis has expressed the need for urgency, requesting an expedited process to align with a court hearing scheduled for February 8. The substantial GBTC shares at stake are not only part of Gemini’s Earn program but also include those acquired during the downfall of Three Arrows Capital.

Legal Entanglements

A contentious issue arises from an additional claim to 31.2 million GBTC shares, valued at approximately $1.2 billion. These shares, pledged to Gemini, are currently caught in a legal predicament concerning their ownership.

Gemini’s Reaction

Gemini Trust Company has responded to the motion with cautious optimism, highlighting it as a significant progression following the approval of GBTC as an exchange-traded product (ETP) earlier in the year.

Market Implications

The proposed offloading of GBTC shares, which represent about 3.2% of Bitcoin’s total circulating supply, is likely to have a considerable impact on the cryptocurrency market. Furthermore, Genesis’ plans include the liquidation of assets related to Ether (ETH) and Ethereum Classic (ETC), as part of a targeted strategy to boost liquidity and address creditor repayment.