Genesis Repays $1.5 Billion in Bitcoin and Ethereum Debt
Recent reports indicate that Genesis Global Capital, a once-bankrupt crypto lender, has successfully completed its restructuring process and has now initiated the repayment of debts to creditors. This development comes after Genesis was involved in significant network transactions in the last day.
Genesis Completes Restructuring Process
Genesis and its affiliated companies have confirmed the successful restructuring of the crypto lending firm, which had previously declared bankruptcy three years ago. The announcement follows the company’s initial plan for debt repayment in November 2023, which faced opposition from its parent company, Digital Currency Group (DCG).
- DCG rejected the repayment plan proposed by Genesis, as it involved paying creditors a minimum of 77% of their deposits, which DCG believed would result in creditors receiving more than the initial owed amount due to the surge in crypto asset valuations.
Approval for Repayment Plan
In May 2024, Genesis obtained approval from US Judge Sean Lane of the Bankruptcy Court Southern District of New York to begin implementing its repayment plan. As per Bloomberg’s report, the company aims to disburse $4 billion in cryptocurrencies and fiat currencies to settle its debts with creditors.
- Creditors with Bitcoin claims will receive 51.28% of their claims in-kind, while Ethereum and Solana creditors will be paid 65.87% and 29.58% of their claims in kind, respectively. Those receiving stablecoins or cash will receive 100% of their claims in US Dollars.
Massive Transactions for Debt Repayment
Genesis executed multiple transactions on Friday, likely in line with its repayment plan. According to reports from Arkham Intelligence, the company transferred a total of $1.5 billion in 16,600 BTC and 166,300 ETH, indicating a significant move towards meeting its debt obligations.
Market Response to Debt Repayments
Historically, large repayments by defunct crypto companies have led to market sell-offs as concerned investors fear the liquidation of assets by creditors. Genesis’s repayment initiative comes shortly after the defunct exchange Mt. Gox began settling its creditors, prompting a cautious market reaction.
- Following Genesis’s debt repayments, the total crypto market cap has seen a decline of 5.52% in the past day, reaching a valuation of $2.18 trillion. Major assets like Bitcoin, Ethereum, and Solana have experienced price decreases of 5.19%, 6.11%, and 7.12%, respectively.
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