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Genesis Moves Over $1.6B Worth of Creditors’ Assets Amid Crypto Market Turmoil

News about Genesis’ recent crypto assets movement has sparked a price downtrend for various cryptocurrencies.

Avatar image of Mishael Nwani Mishael Nwani•August 3, 2024
Crypto assets

Bankrupt crypto lending firm Genesis has moved 16,600 BTC and 166,300 ETH worth over $1.6 billion, bringing the firm closer to repaying creditors. Blockchain analytics platform Arkham Intelligence shared details about the movement of on-chain funds earlier on Friday. Arkham added that Genesis will likely repay creditors in kind (cryptocurrencies) instead of fiat currencies.

Although this is good news for the affected customers, the reimbursement plan may negatively impact the affected cryptocurrencies’ market value.

Genesis to Repay $3B

Genesis’ woes date back to 2022 when its crypto lending business crumbled after the downfall of hedge fund Three Arrows Capital and crypto exchange FTX. In January 2023, the firm filed for bankruptcy and revealed that it had over 100,000 creditors and liabilities worth between $1.2 billion and $11 billion. Genesis has struggled to reimburse its creditors ever since.

The troubled crypto lender revealed that it owed over $3.5 billion to its 50 top creditors. In May, the firm secured court approval to distribute $3 billion to creditors, representing 77% of the funds. Still, its parent company, Digital Currency Group (DCG), was excluded from the list of creditors to be reimbursed.

The latest funds transfers indicate that Genesis is soon to commence repayments. This move aligns the crypto lender with other crypto-based firms, like FTX, which are also working towards creditors’ repayments. Last month, defunct Bitcoin exchange Mt. Gox began repaying its creditors part of their funds stuck for roughly a decade.

Impact on Crypto Market

Concerns about Genesis funds’ movement have partly triggered a price fall for the two leading cryptocurrencies. At the time of writing, BTC sold for $63,000, representing a 6.4% price decrease in the past week. ETH, on its part, plunged to $3,000, indicating a 6.85% downtrend over the past week.

Mishael Nwani

Mishael Nwani is an avid crypto enthusiast with nearly four years of experience in the industry. Since 2022, he has covered topics across cryptocurrencies, NFTs, artificial intelligence, and financial markets.