Genesis Approved to Sell $1.6 Billion in Grayscale Shares Amid Legal Battles

Genesis Global Trading has won court permission to offload $1.6 billion worth of Grayscale Investment shares, such as GBTC and ETHE, despite objections from its parent company, Digital Currency Group (DCG). The court's decision allows Genesis to sell these shares for Bitcoin or cash, freely choosing the quantity and timing without DCG's involvement in the sales strategy. Court's Decision on Share Sales Judge Sean Lane has authorized Genesis to proceed with selling its Grayscale shares, emphasizing the company's autonomy in conducting these sales through a broker if necessary. Lane highlighted DCG's conflict of interest, suggesting their advice might not be impartial.

Genesis holds significant amounts of Grayscale's cryptocurrency trusts, with their portfolio valued at $1.6 billion. The company aims to sell these assets amidst DCG's attempts to postpone the sale pending a court-approved debt repayment plan. DCG fears premature sales could affect the plan's approval. Genesis' Legal and Financial Troubles The backdrop to Genesis's asset sale is its financial distress, exacerbated by the 2022 collapse of FTX and Alameda Research. The company sought Chapter 11 bankruptcy protection in January after failing to negotiate a settlement with creditors.

Regulatory Challenges and Legal Actions The SEC has fined Genesis $21 million for selling unregistered securities through the Gemini Earn program. Additionally, Genesis settled with the New York Department of Financial Services (NYDFS) over compliance failures, which the NYDFS claims compromised the company and its clients. Genesis also filed a lawsuit against the Gemini exchange, alleging that Gemini's withdrawals before the bankruptcy filing harmed other creditors.