Genesis Begins $1.5B Bitcoin and Ethereum Repayments To Creditors

Genesis Global and its affiliates are set to kickstart the distribution of the $4 billion worth of digital assets and U.S. dollars to their long list of creditors. 

Genesis Global Huge Debts 

Genesis Global, the now-defunct crypto lender officially announced in a press release today the completion of its restructuring process. The company also stated that the $4 billion repayment to its creditors has already commenced. This happened after the firm sought bankruptcy protection in January 2023 after months of uncertainty regarding the status of its assets.

It was reported that Genesis-connected wallets offloaded $1.5 billion worth of Bitcoin (BTC) and Ethereum (ETH). Basically, in Genesis’ case, its repayment plan is different from usual bankruptcy situations. The approved plan did not restrict the recoveries to the value at the time of the petition. 

Instead, creditors will receive an average of 64% of their owed cryptocurrency during the initial distribution, varying depending on the specific coin. However, creditors who owned stablecoins or U.S. dollars at the time will receive 100% of their locked funds.

The firm faced challenges post-market downturn in 2022, leading to financial support from Digital Currency Group but ultimately still filed for bankruptcy. Also, the firm paid a $2 billion settlement to the New York Attorney General in May over alleged investor deception.

Also in May, the U.S. Judge Sean Lane greenlit the firm’s bankruptcy distribution plan. It was revealed it has over 100,000 creditors and up to $10 billion in liabilities. Among these, about $3 billion was owed to Genesis top 50 creditors, including Gemini, VanEck, and Cumberland. 

Bitcoin’s Ripple Effect 

The price of Bitcoin took a hit due to the heavy offload event commenced by Genesis. The digital asset price has dipped to $62,034.95, down by 4.42% in the last 24 hours as per Coinmarketcap data. 

The market tends to be volatile when there is an offload of Bitcoin assets. This was proven in July when the price plummeted below $58,000. Market watchers attributed this steep decline to activity from wallets associated with the crypto exchange Mt. Gox and the concluded Germany’s selling spree.

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