Learn Concept: Genesis's Bankruptcy Resolution via Bitcoin Procurement

By: Isha Das

In an unusual approach to bankruptcy settlement, crypto lender Genesis Global Capital has transformed all of its Grayscale Bitcoin Trust (GBTC) shares into Bitcoin form. Having been insolvent since January 2023, Genesis resorted to this method in efforts to resolve the creditors' settlements. A total of 36 million GBTC shares were off-loaded legally, amounting to a total sales of $2.1 billion. Upon completion of this step, Genesis used these funds to procure around 32,041 Bitcoins at an approximate price of $65,685.

The purchased Bitcoins are aimed for use as a part of Genesis's repayment strategy aimed towards its creditors, with specific emphasis on creditors from the Gemini Earn program. However, this strategy has been facing opposition from its parent institution, Digital Currency Group (DCG), over potential violations of Bankruptcy Code's fairness virtues.

This concept is a distinct representation of how crypto assets can be employed in bankruptcy settlements, giving rise to new financial strategies.