Genesis, a troubled crypto lending firm, has made headlines by purchasing $2.1 billion worth of Bitcoin (BTC) after selling off 36 million shares of the Grayscale Bitcoin Trust (GBTC). The move is part of Genesis’s efforts to repay creditors, as reported by Bloomberg Law.

The New York bankruptcy court approved the sale of the GBTC shares on Feb. 14, along with shares from Grayscale Ethereum (ETH) trusts. Initially, the GBTC shares were valued at $1.4 billion, while shares in Grayscale Ethereum Trust were valued at $165 million, and shares in Grayscale Ethereum Classic Trust were valued at $38 million.

With the recent surge in Bitcoin prices, the value of the coins purchased with the proceeds from the GBTC shares has now risen to nearly $2.2 billion. Genesis plans to distribute these coins to its Gemini Earn creditors as part of its repayment strategy.

The move has sparked mixed reactions within the crypto community. While Coinbase reassured that the sell-off would likely not cause major market disruptions, concerns remain about the impact on GBTC and the wider crypto industry.

Genesis’s financial troubles began after the fallout of the FTX bankruptcy in late 2022, which forced the firm to explore various options, including a workforce reduction and hiring investment bank Moelis & Co. The bankruptcy filing raised questions about the stability of Grayscale Bitcoin Trust, with market observers wary of a potential liquidation of over 600,000 Bitcoins linked to the Genesis bankruptcy.

Despite these challenges, Genesis recently settled a lawsuit with New York Attorney General Letitia James over allegations related to its Earn program. The settlement aims to return assets to former Earn customers and other Genesis creditors, pending approval by a bankruptcy judge.

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