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Genesis Looks to Sell $1.4B in Bitcoin Trust - Market Crash Ahead?

Genesis wants to sell $1.4bn worth of GBTC. When FTX sold $1bn of its GTBC holdings, BTC crashed from $49K to $39K

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Genesis is seeking a judge's approval to sell $1.4 billion worth of the Grayscale Bitcoin Trust.

The bankrupt crypto lender filed a motion on Friday asking a judge to approve the sale of 36 million shares of the trust, which is worth around $1.4 billion.

9 million shares of the Grayscale Ethereum Trust and 3 million shares of Grayscale Ethereum Classic Trust are also on the chopping block.

If approved, the motion could add more selling pressure on Bitcoin and trigger another market sell-off. When FTX sold over $1 billion worth of GBTC holdings, Bitcoin's price plummeted from $49,000 to $39,000.

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In November, Genesis sued Gemini Trust to recover funds withdrawn by customers in the bank run that led to Genesis's bankruptcy.

In the lawsuit, Genesis claimed up to 230,000 users under the "Earn investing program" withdrew $689 million from its platform in 90 days before it filed for bankruptcy.

It is also argued that US bankruptcy laws allow for the clawback of withdrawals to enable fair distribution among creditors.

Genesis borrowed assets from Earn customers and re-invested the funds to pay interest to customers. Gemini served as the custodian that processed deposits and withdrawals, earning a cut from payments by Genesis to Earn users.

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