Genesis has recently transferred $2.12 billion in Bitcoin and $838 million in Ethereum as part of its bankruptcy restructuring. As part of its court-approved plan, Genesis will return $3 billion to creditors, addressing 77% of customer claims.
In the past three days, Genesis Trading moved approximately 32,256 BTC and 256,775 ETH to various addresses. This significant asset transfer is part of their strategy to manage creditor repayments during the ongoing restructuring process.
The crisis for Genesis began in November 2022 with the collapse of the FTX exchange, which severely impacted their derivatives business. Genesis halted withdrawals and filed for Chapter 11 bankruptcy in January 2023 due to massive losses tied to the FTX failure and the collapse of Three Arrows Capital.
At that time, Genesis owed over $3.5 billion to its top creditors. The recent settlement plan approved by the court is set to return $3 billion to customers, covering about 77% of the total claims. Initially, claims were trading at only 35% of their value, but now larger claims are trading between 97-110% and smaller claims between 74-94%.
Digital Currency Group (DCG), Genesis’s parent company, will not receive any payout from this settlement. The court determined that Genesis’s estate lacks sufficient value to provide DCG any recovery as an equity holder. This ruling came after DCG’s attempt to limit customer claims to January 2023 cryptocurrency values, which could have enabled full repayment and a potential recovery for DCG. Additionally, DCG had assumed $1.1 billion of Genesis’s debt from the Three Arrows Capital collapse, but this did not cover the losses.
