Genesis transfers $3b worth of crypto amid bankruptcy

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As a seasoned analyst with over two decades of experience navigating the complexities of financial markets, I’ve witnessed my fair share of turbulence and recovery. The recent activities of Genesis Trading have piqued my interest, not just because of the magnitude of the transactions but also due to the backdrop against which they are unfolding.

In the past few days, Genesis Trading may have transferred vast sums of money, possibly for the purpose of handling payments to creditors, as part of their ongoing financial reconstruction process.

In recent days, the cryptocurrency lending company, currently dealing with bankruptcy, appears to have moved significant quantities of Bitcoin (BTC) and Ethereum (ETH).

Over the last three days, wallets linked to Genesis have apparently transferred roughly $2.12 billion in Bitcoin (32,256 BTC) and $838 million in Ethereum (256,775 ETH). Notably, within an hour, there were significant transfers of 16,600 BTC ($1.1 billion) and 166,300 ETH ($521.1 million), indicating that these assets might be distributed to meet creditor demands, suggesting a possible reallocation.

Genesis Trading recently moved approximately 32,256 Bitcoin (valued at around $2.12 billion) and 256,775 Ether ($838 million) to numerous wallets over the past three days, leading some to speculate that it might be initiating bankruptcy proceedings to settle outstanding debts. Additionally, it’s worth noting that between June 12th and July 15th, Genesis Trading transferred around 13,291 Bitcoin ($830.7 million) to Coinbase.

— Lookonchain (@lookonchain) August 2, 2024

As a seasoned professional with a rich background in finance, I have often witnessed companies undergoing financial restructuring to regain their footing and continue operations. In my personal experience, one key aspect that sets successful turnarounds apart is a proactive approach to managing creditor repayments. This is exactly what Genesis Trading seems to be doing with this activity – taking steps to ensure they meet their financial obligations while navigating through their ongoing restructuring process. It’s a prudent move that demonstrates their commitment to transparency and responsibility, which in turn builds trust among stakeholders.

The genesis of all the Genesis Trading troubles 

Genesis Trading’s legal and monetary issues were ignited when the crypto trading platform FTX collapsed in November 2022, causing a ripple effect throughout the market.

In January 2023, Genesis faced financial difficulties when it was unable to access over $175 million in cryptocurrencies held in a FTX trading account due to issues with its derivatives business. As a result, Genesis temporarily stopped withdrawals and ultimately filed for bankruptcy.

In May 2023, Genesis agreed to a significant $3 billion compensation deal with New York due to accusations that they misled approximately 230,000 investors through their Earn platform. Later in October 2023, a bankruptcy court judge in New York gave the go-ahead for a $175 million settlement between Genesis and FTX, which also dismissed various lawsuits against Genesis.

The court granted Genesis permission to dispense both cash and cryptocurrency to its debtors, which could account for the recent activity observed in the past three days. These payments are expected to roughly satisfy around 77% of the overall value of all claims.

Genesis’s sale of assets and resolution of debts is contributing to an expanding series of disruptions in the supply of cryptocurrencies, mirroring a larger volatility within the industry.

Due to the latest selloff of 50,000 Bitcoins by the German administration, Bitcoin distributed from the bankrupt exchange Mt. Gox, and expected sales from the U.S. government’s Bitcoin reserves, there have been ongoing supply issues in the cryptocurrency market.

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2024-08-03 01:21