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Grayscale Bitcoin Trust Terminates Significant Agreement with Genesis

According to recent filings with the U.S. Securities and Exchange Commission (SEC), Grayscale Bitcoin Trust has terminated two agreements with cryptocurrency broker Genesis.

First, Genesis will no longer assist Grayscale in the distribution and marketing of Grayscale shares. Second, after October 3rd, Genesis will no longer be an official participant in the Trust, but will continue to serve as Grayscale’s liquidity provider. The two agreements entered into force in 2019.

The foregoing responsibilities were subsequently transferred to Grayscale Securities LLC, a wholly owned subsidiary of Grayscale Investments LLC and an affiliate of Grayscale Bitcoin Trust. In the past, Genesis has helped Grayscale promote the Trust on social media and transfer digital assets to create shares in the Trust.

However, as part of the ongoing crypto winter, Genesis seems to have had a tough time. Last week, Genesis director Matthew Ballensweig announced he was stepping down and moving to an advisory role. In August, Genesis CEO Michael Moro also stepped down, while the company cut its headcount by 20% to cut costs. Moro previously admitted that Genesis funds helped fund some of the losses after Digital Currency Group, the parent company of crypto hedge fund Three Arrows Genesis, was forced to intervene.

Grayscale has attempted to convert Bitcoin Trust from an over-the-counter market trading to an exchange-traded fund this year. However, the SEC failed to show that the proposal was “designed to prevent fraudulent and manipulative conduct and practices.”

In response, Grayscale CEO Michael Sonnenschein said that when he rejected the listing application of the Grayscale Bitcoin Trust, it “failed to apply consistent treatment to similar investment vehicles.” has filed a lawsuit against the SEC. Partly due to the perceived risk of litigation, GBTC shares have traded consistently below Bitcoin’s spot price since 2021, with a discount rate of 35 %, an all-time high at the time this article was published.