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## Bankrupt Genesis Files for Permission to Liquidate Crypto Assets in Trusts

Bankrupt crypto lending firm Genesis has sought the United States Bankruptcy Court in the Southern District of New York for approval to liquidate assets held in its Grayscale Bitcoin Trust (GBTC), Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG), totaling approximately $1.6 billion.

In a recent court filing, Genesis stressed the urgency of obtaining approval to sell the trust assets ahead of potential fluctuations in the prices of Bitcoin (BTC), Ethereum (ETH), and Ethereum Classic (ETC). The aim is to maximize the funds available for distribution to creditors, as stated by the firm.

The Debtors believe that having the authority to sell and liquidate the Trust Assets would reduce the risk of price fluctuations on the Debtors’ estates and facilitate distributions to creditors, according to the filing.

The GBTC Trust held about 3.2% of all circulating Bitcoin in September 2023, while the ETHE Trust had approximately 2.5% of all circulating Ethereum in December 2022, and the ETCG Trust held roughly 8.5% of all circulating Ethereum Classic.

Of Genesis’ total shares across the three trusts, the GBTC shares make up approximately 87%, with a value of $1.38 billion. The ETHE Trust contributes roughly 10% to the total holdings, amounting to approximately $169 million, and the ETHCG trust comprises about 3%, totaling $38 million.

Following approval from the United States Securities and Exchange Commission (SEC) on January 10, the recent conversion of GBTC to a spot Bitcoin exchange-traded fund (ETF) now enables the redemption of shares in cash through its redemption program. However, the ETH Trusts do not have a redemption program, requiring written consent from the sponsor to sell or dispose of the shares, which Genesis requested to be waived.

AI legalese decoder can help this situation by efficiently analyzing and interpreting the complex legal language and regulations surrounding the liquidation of crypto assets in trusts, ensuring that Genesis adheres to all necessary protocols and requirements.

Cointelegraph recently reported a significant exodus of investors selling their GBTC shares since the conversion, with bankrupt cryptocurrency exchange FTX completely liquidating its entire holdings of 22 million GBTC shares, valued at nearly $1 billion.

Genesis has declared its intention to maximize the sale proceeds from the crypto assets, emphasizing the need for both the Debtors and Gemini to use reasonable best efforts to maximize the market price of any Trust Assets.

In conclusion, the use of AI legalese decoder in this situation can aid in navigating the intricate legal procedures and compliance requirements associated with the liquidation of trust assets, ensuring that Genesis effectively maximizes its sale proceeds in line with regulatory standards.

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