Genesis Moves $1.5B Bitcoin and Ethereum for Debt Repayment, Market Reacts with Sharp Decline

• Genesis Global Capital has successfully concluded its restructuring and has initiated debt repayments to creditors.
• Large-scale network transactions were reported as a part of Genesis’s repayment process.
• The restructuring follows their bankruptcy declaration three years ago, involving significant asset movements.

Genesis Global Capital Completes Restructuring: Begins Repayment of $1.5 Billion to Creditors in Bitcoin and Ethereum

Genesis Executes Debt Repayment Following Court Approval

On Friday, Genesis Global Capital, alongside its affiliated companies, officially completed its restructuring process after three years of bankruptcy proceedings. This milestone, reported by Bloomberg, marks the beginning of substantial debt repayment to creditors.

The key development was initiated following the approval from the US Bankruptcy Court in the Southern District of New York, overseen by Judge Sean Lane in May 2024. Genesis’s detailed repayment strategy encompasses the distribution of approximately $4 billion in both cryptocurrencies and fiat currencies.

Initial Repayment Plan and Opposition

Originally presented in November 2023, Genesis’s repayment plan faced significant opposition, primarily from its parent company, Digital Currency Group (DCG). The resistance stemmed from DCG’s concern that the plan would result in creditors receiving significantly more than their original deposits due to the appreciation of crypto assets over time. However, the approved plan outlines specific disbursements: Bitcoin creditors will receive 51.28% of their claims, Ethereum creditors will get 65.87%, and Solana creditors will attain 29.58% of their claims. Creditors of stablecoins or cash will receive 100% of their claims in US dollars.

Significant Transactions and Repayment Execution

As part of the repayment process, Genesis conducted multiple significant transactions on Friday. According to Arkham Intelligence, the firm moved a total of $1.5 billion, splitting into 16,600 BTC (approximately $1.1 billion) and 166,300 ETH (valued at around $521.1 million). These transactions are critical to the distribution in-kind to its creditors.

Market Response to Genesis’s Repayment Activities

The cryptocurrency market tends to react adversely to large repayments from defunct crypto firms, often leading to sell-offs. This behavior arises from the tendency of recipients to liquidate their newly received assets quickly. Genesis’s recent activities echo the market’s reaction to Mt. Gox’s creditor settlements initiated last month.

In the past day, the total cryptocurrency market cap has decreased by 5.52%, now valued at $2.18 trillion. Bitcoin’s price has dropped by 5.19%, trading at approximately $60,100. Similarly, other significant assets like Ethereum and Solana have faced declines of 6.11% and 7.12%, respectively.

Conclusion

Genesis Global Capital’s completion of its restructuring and the commencement of substantial debt repayments demonstrate a significant turnaround following its bankruptcy. The market’s immediate reaction, marked by a sell-off, underscores the crypto community’s cautious stance. As Genesis progresses with its repayment plan, the ongoing developments will likely continue to influence market dynamics. Observers and investors should stay tuned to this unfolding situation for further insights and strategic responses.