Key Points
- Genesis Trading has reportedly moved significant amounts of Bitcoin and Ethereum, possibly for creditor repayments.
- The crypto lender’s financial restructuring is ongoing following the collapse of the FTX crypto exchange.
Genesis Trading, a crypto lender currently undergoing bankruptcy, has reportedly shifted considerable quantities of Bitcoin (BTC) and Ethereum (ETH) in recent days.
Asset Movement and Creditor Repayments
Accounts linked to Genesis are said to have transferred 32,256 BTC, valued at around $2.12 billion, and 256,775 ETH, worth about $838 million, over the past three days. These transactions included large transfers of 16,600 BTC ($1.1 billion) and 166,300 ETH ($521.1 million) within a single hour, indicating that these assets are likely being redistributed to meet creditor demands.
This activity is part of Genesis Trading’s strategy to manage creditor repayments during its ongoing financial restructuring.
The Troubles of Genesis Trading
Genesis Trading’s legal and financial issues began with the collapse of the FTX crypto exchange in November 2022, causing market contagion. Genesis was heavily impacted, primarily through its derivatives business, which lost access to $175 million in crypto assets locked in an FTX trading account. As a result, Genesis halted withdrawals and filed for bankruptcy in January 2023.
In May 2023, Genesis reached a substantial $3 billion settlement with New York over allegations of defrauding 230,000 investors through its Earn program. In October 2023, a New York bankruptcy judge approved a $175 million settlement between Genesis and FTX, including the dismissal of multiple claims against Genesis.
The court authorized Genesis to distribute cash and crypto to its creditors, possibly explaining the asset movement over the last three days. The repayments should cover approximately 77% of the total claims’ value.
Genesis’s asset liquidations and settlements contribute to the growing list of supply shocks for the crypto market, reflecting broader instability in the sector. With the recent sale of 50,000 BTC by the German government, distributions from bankrupt exchange Mt. Gox, and impending sales from the U.S. government’s BTC stash, the crypto market continues to face supply disruptions.
