Crypto Lender Genesis has received approval from a New York court to sell 1.6 Billion in Bitcoin and Ethereum (ETH) trust shares. The lender filed for bankruptcy in January and will look to use the funds from the BTC and ETH sales to pay back creditors.
U.S bankruptcy judge Sean Lane approved Wednesday to allow Genesis to monetize the sales of these Bitcoin and ETH shares. The shares come from Grayscale Bitcoin Trust, Grayscale Ethereum Trust, and Grayscale Ethereum Classic Trust. The Bitcoin shares are worth approximately $1.38 billion. The Ethereum and ETH classic trust shares total around $207 million at current rates.
Genesis told the judge in official court filings that the profits of these sales needed to go towards repaying customers, as well as to avoid paying $1.9 million in monthly fees on its trust agreements. It’s important to note that Genesis Global has yet to receive approval from courts for its overall bankruptcy plan.
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Furthermore, Genesis reached an agreement early on in February to shut down the company and repay customers in either cryptocurrency or cash. The repayment method depends on how customers deposit funds into their Genesis accounts. The SEC and New York Attorney General Letitia James approved this plan. Genesis will also pay the SEC a $21 million fine if they have any money left over after repaying customers. This ensures that Genesis doesn’t keep any of the sales profits in the bankruptcy plan.
Genesis filed for bankruptcy in January 2023 following a lawsuit by the SEC. The SEC claims that Genesis sold illegal securities, and claimed that the lender halting customer withdrawals in November 2023 was fraudulent.