Genesis Trading recently completed a significant transfer of assets, moving 32,256 BTC valued at $2.12 billion and 256,775 ETH worth about $838 million to various addresses. This transfer is part of the company’s efforts to manage creditor repayments as it undergoes financial restructuring, including bankruptcy proceedings.
The company’s financial troubles began in November 2022 following the collapse of the FTX crypto exchange, which had a severe impact on Genesis Trading’s derivatives business. Subsequently, Genesis halted withdrawals and filed for Chapter 11 bankruptcy protection in January 2023, owing over $3.5 billion to its top creditors.
However, a recent court-approved settlement plan aims to return $3 billion to Genesis’s customers, covering approximately 77% of customer claims. Initially, claims were trading at only 35% of their value, but current trading prices have increased significantly, with claims over $10 million trading between 97-110% of their value.
Notably, Digital Currency Group (DCG), the parent company of Genesis, will not benefit from this settlement. The court determined that there is not enough value in Genesis’s estate to provide DCG with any recovery as an equity holder. This decision was influenced by DCG’s unsuccessful attempt to cap customer claims at January 2023 cryptocurrency values, which would have allowed for full repayment to customers and potentially a recovery for DCG.
Furthermore, DCG had taken on $1.1 billion of Genesis’s debt from the collapse of Three Arrows Capital, but this obligation did not cover the losses incurred. Overall, the settlement plan represents a significant step towards resolving Genesis Trading’s financial challenges and meeting its obligations to creditors and customers.