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On Saturday, cryptocurrency exchange Gemini Trust Co announced that Genesis, a crypto lender, has filed a motion in the U.S. Bankruptcy Court seeking authorization to sell trust assets.
The motion specifically aims to monetize Genesis’s interests in two Grayscale Ethereum trusts, providing investors exposure to cryptocurrency.
Authorization for Monetizing Grayscale Bitcoin Trust:
As part of the motion filed by Genesis, the company is seeking authorization for Gemini to monetize the initial collateral of 30,905,782 shares of Grayscale Bitcoin Trust.
The move is designed to navigate the complexities of the cryptocurrency market and streamline the liquidation process.
Expedited Hearing Requested:
Genesis has requested an expedited hearing on the motion, with the hearing scheduled for February 8, as disclosed by Gemini in a statement.
The swift resolution indicates the urgency with which Genesis aims to proceed with the liquidation plan and monetize trust assets.
Recent Settlement with SEC:
Genesis settled a lawsuit with the U.S. Securities and Exchange Commission (SEC) earlier this week related to its now-defunct Gemini Earn lending program.
The settlement marked a step forward for Genesis, allowing the company to focus on its liquidation plan and addressing customer repayments.
Liquidation Plan and Customer Repayment:
Genesis’s liquidation plan is designed to repay customers in cash or cryptocurrency, depending on the currency they deposited in the Earn program.
The program was halted during a cryptocurrency market crash in November 2023, leading to ongoing litigation involving Genesis, Gemini, and Genesis’s parent company, Digital Currency Group.
Ongoing Litigation Dynamics:
The failure of the Earn program has triggered legal disputes among Genesis, Gemini, and Digital Currency Group.
The liquidation plan is a strategic move by Genesis to navigate these complexities and address the fallout from the program’s discontinuation during a volatile market period.
