Bitrabo Editorial
Genesis Global Capital, a bankrupt crypto lender, has successfully finished its restructuring process and has now commenced repaying its debts to creditors. This development coincides with reports of significant network transactions by Genesis in recent days.
Genesis Repays Debts with $1.5 Billion in Bitcoin and Ethereum
A recent Bloomberg report revealed that Genesis and its affiliated companies have finalized the restructuring of the crypto lending firm after declaring bankruptcy three years ago.
Initially, Genesis faced opposition to its repayment plan announced in November 2023, notably from its parent company, Digital Currency Group (DCG). DCG was against paying creditors a minimum of 77% of their deposits at the time of bankruptcy, arguing that it would overcompensate creditors due to the surge in crypto asset values.
However, in May 2024, Genesis obtained approval from US Judge Sean Lane to proceed with its repayment plan. As per Bloomberg, Genesis plans to distribute $4 billion in cryptocurrencies and fiat currencies to creditors.
Under this plan, Bitcoin holders will receive 51.28% of their claims in-kind, Ethereum holders 65.87%, Solana holders 29.58%, and those with stablecoins or cash will be repaid in full. Genesis has already executed transactions totaling $1.5 billion, involving 16,600 BTC and 166,300 ETH.
Market Response to Genesis Debt Repayments
Typically, large repayments by insolvent crypto firms trigger market sell-offs, as recompensated parties may swiftly sell their received assets. Genesis began its repayment plan shortly after defunct exchange Mt. Gox started repaying creditors.
The crypto market has reacted similarly, witnessing a 5.52% decline in total market capitalization, reaching $2.18 trillion. Bitcoin’s price dropped by 5.19% to $60,100, while Ethereum and Solana registered losses of 6.11% and 7.12%, respectively.
Featured image from Investopedia, chart from Tradingview.com