Genesis Global Capital, a bankrupt crypto lender, has completed its restructuring and started repaying creditors. The development comes amid reports that Genesis has been conducting large-scale network transactions in the last day.
Genesis Moves $1.5 Billion in Bitcoin and Ethereum to Pay Off Debt
according to Bloomberg Report Genesis and all its related companies announced on Friday a complete restructuring of the crypto lending company after it filed for bankruptcy three years ago.
Genesis first announced a repayment plan in November 2023 that faced strong opposition from Genesis’ parent company – Digital Currency Group (DCG) – which rejected the idea of paying at least 77% of their deposits to creditors at the time of bankruptcy. DCG believes that such an action would result in investors receiving a larger amount than initially due given the rise in crypto asset valuations over the past year.
However, in May 2024, Genesis received approval from US Judge Sean Lane of the Southern District of New York Bankruptcy Court to finally implement its proposed repayment plan. According to a Bloomberg report, the crypto lending company aims to disburse $4 billion in cryptocurrencies and fiat currencies to repay creditors.
In achieving this goal, all creditors owed in Bitcoin will only receive 51.28% of their in-kind claims. Meanwhile, all Ethereum and Solana creditors will receive 65.87% and 29.58% of their in-kind claims, respectively. In addition, all creditors receiving stablecoins or cash will receive 100% of their claims in USD.
It is worth noting that Genesis has already executed several transactions on Friday, most likely as part of the company’s repayment plan. According to Report from Arkham Intelligence, The virtual crypto lender moved a total of $1.5 billion in 16,600 BTC ($1.1 billion), and 166,300 ETH ($521.1 million).
BREAKING: GENESIS Moves $1.5 Billion in BTC + ETH to Pay Off Creditors
Wallets linked to Genesis Trading moved 16.6k BTC ($1.1 billion) and 166.3k ETH ($521.1 million) in the past hour — most likely to make in-kind payments to creditors.
Bitcoin: bc1qmetf6pu6ghr6fv92209sw5x9t5999562t8wmux
Ethereum:… pic.twitter.com/5Jtxqx8mxT– Arkham (@ArkhamIntel) August 2, 2024
Market Reacts to Genesis Debt Repayment
Historically, large payouts by collapsed crypto companies have led to market sell-offs due to concerns that compensated victims will quickly liquidate their newly acquired assets. Interestingly, Genesis began its repayment plan just one month after the defunct Mt. Gox exchange began settling its debts.
So far, the cryptocurrency market has shown a similar reaction as the total cryptocurrency market cap has fallen by 5.52% in the past day to $2.18 trillion. According to Data from CoinMarketCapBitcoin has now seen a 5.19% price drop, sending the asset to trade as low as $60,100. Meanwhile, other major assets like Ethereum and Solana are also in the red with losses of 6.11% and 7.12% respectively.
Featured image from Investopedia, chart from Tradingview.com