Genesis Finalizes Restructuring Plan, Initiates Repayments

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As a seasoned analyst with over two decades of experience navigating the tumultuous waters of traditional finance and, more recently, the cryptosphere, I must admit that watching the unfolding drama of Genesis Global Capital’s restructuring has been nothing short of captivating.

After completing its reorganization, Genesis Global Capital has initiated the repayment of debts to their creditors. Notably, it’s been reported that Genesis has recently carried out substantial financial transactions within the network during the previous 24 hours.

Genesis Moves $1.5 Billion Bitcoin And Ethereum For Debt Repayment

Based on a Bloomberg report published on Friday, Genesis and all its affiliated entities have revealed their comprehensive restructuring plan for the cryptocurrency lending company, which filed for bankruptcy three years ago.

In November 2023, Genesis initially proposed a repayment strategy, but this plan faced strong resistance from its parent company, Digital Currency Group (DCG). DCG contended that the plan to pay creditors at least 77% of their deposits during bankruptcy would provide investors with more than they originally owed, given the significant increase in the value of cryptocurrencies over the past year.

In May 2024, Genesis received approval from Judge Sean Lane of the Bankruptcy Court Southern District of New York, allowing them to initially carry out their proposed repayment strategy. As per Bloomberg’s report, this crypto lender plans to distribute approximately $4 billion in a mix of cryptocurrencies and traditional currencies as reimbursement to creditors.

To meet this objective, Bitcoin creditors will receive approximately 51.28% of their debts in the form of Bitcoin itself. Conversely, Ethereum and Solana creditors will be repaid about 65.87% and 29.58%, respectively, in the same cryptocurrencies they are owed. It’s important to note that those receiving stablecoins or cash will receive a full 100% of their claims in United States Dollars.

It’s worth mentioning that Genesis completed several transactions on Friday, which appear to be related to the company’s repayment strategy. As per a report from Arkham Intelligence, this crypto lender moved approximately 16,600 Bitcoin (equivalent to $1.1 billion) and 166,300 Ether ($521.1 million) off its platform.

BREAKING: GENESIS MOVING $1.5B BTC + ETH FOR CREDITOR REPAYMENTS
Over the past hour, wallets connected with Genesis Trading have transferred approximately 16,600 Bitcoin (equivalent to $1.1 billion) and 166,300 Ethereum ($521.1 million). This activity is likely related to repayments made in kind to creditors.
BTC: bc1qmetf6pu6ghr6fv92209sw5x9t5999562t8wmuxETH:…
— Arkham (@ArkhamIntel) August 2, 2024

Market Reacts To Genesis Debt Repayments

When failed crypto companies pay back money, people worry they’ll sell the returned assets right away, causing a drop in market value. It’s interesting that Genesis and Mt. Gox started repaying their debts around the same time.)

To date, the cryptocurrency market has mirrored a common trend, as the overall crypto market capitalization dropped by approximately 5.52% within the last 24 hours, reaching a value of $2.18 trillion. As per CoinMarketCap’s data, Bitcoin has suffered a 5.19% price decrease, allowing it to trade at as low as $60,100. Similarly, significant coins like Ethereum and Solana are also showing losses, with Ethereum experiencing a 6.11% drop and Solana recording a decline of 7.12%.

Genesis Finalizes Restructuring Plan, Initiates Repayments

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2024-08-03 22:11