Bankrupt Genesis Global Fortifies Debt Settlement Strategy With $2.1B Bitcoin Stockpile

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Genesis Global Capital, the beleaguered cryptocurrency lender grappling with bankruptcy since January 2023, has recently intensified attempts to compensate its creditors. This effort has seen the company divest its entire stake in Grayscale GBTC, thereby amassing a sizeable Bitcoin stockpile to propel its debt settlement strategy forward.

The sale of Genesis’ massive battalion of 36 million GBTC shares was wrapped up as of Friday, based on a report put forth by Bloomberg Law. This was shared by the company’s legal corps during a court filing on April 2. Genesis earned its lawful green light to sell its GBTC shares on February 2, with each share appraised at $38.50. However, court records reveal that, upon the time of sale on April 2, the GBTC shares had surged in value to $58.50 each, ushering in a grand total value of $2.1 billion upon sale.

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As disclosed in Bloomberg’s exposé, Genesis channeled the proceeds of this lucrative sale towards the acquisition of 32,041 Bitcoin units at a market ballpark figure of $65,685. This treasure trove of Bitcoin will soon be doled out to creditors, forming the backbone of its repayment blueprint. This will especially hold true for those involved in the Gemini Earn program.

Genesis’ bankruptcy arrangement converts GBTC shares into either Bitcoin or hard cash. It is the cornerstone of their present debt settlement plans aimed at the relentless quest to repay its astronomical $3.5 billion debt to creditors.

However, the road to recovery has not been devoid of obstacles for Genesis. It has been confronted with a formidable adversary in the form of its own parent company, Digital Currency Group (DCG). Genesis’ proposed debt settlement scheme has been a bone of contention for DCG. The parent company contends that its financially crippled subsidiary’s ambitious plans will lead to settling creditors’ claims in excess of their respective due amounts.

DCG criticizes Genesis’ approach to debt settlement, arguing that it edges on violating bankruptcy laws. According to DCG, this proposed strategy is skewed in favor of senior creditors who will benefit the most from a rise in the value of Genesis’s digital assets, leaving equity holders and company stakeholders at a disadvantage.

Genesis first threw open its doors to the world in 2013. It has been a significant force in the crypto industry and its filing for bankruptcy signposts a major event. The downfall of Genesis can largely be traced back to the sudden implosion of the now-defunct cryptocurrency exchange FTX.

Meanwhile, Bitcoin has managed to make some headway in the cryptocurrency market, roping in a 2.55% surge to finally hit a price ceiling of $69,339 in the past day. This is indicative of a much-needed glimmer of hope, especially for investors who have been riding out the token’s generally bearish performance of late. Bitcoin’s price structure on the grand scale remains largely optimistic as the market eagerly awaits the imminent halving event on April 19, which is expected to slash mining rewards from 6.25 BTC to 3.125 BTC.