Genesis Global Pays $1.5 Billion to Creditors in Massive Crypto Settlement Following FTX Collapse

• Genesis Global moves $1.5B in BTC and ETH for creditor repayment, signaling a significant step towards financial recovery.
• The $1.5B asset movement includes 16.6K Bitcoin worth $1.1B and 166.3K Ethereum valued at $521.1M for creditor repayments.
• Genesis’ proactive repayment approach highlights transparency and sets a precedent for future crypto bankruptcy cases.

Genesis Global, a previously severely bankrupt bitcoin lender, paid creditors $1.5 billion in settlement. Archam Intelligence, a cryptocurrency data analytics company, claims that Bitcoin and Ethereum are where the money is kept. The FTX Derivatives Exchange’s Q42022 insolvency caused Genesis Global to suffer harm, which prompted this action.

Genesis stopped taking withdrawals and declared bankruptcy after FTX. It faced challenges with Winklevoss’ Gemini over their Earn program. For context, Gemini used Genesis to generate yields on customers’ Earn crypto deposits. 

Genesis loaned funds to Three Arrows Capital, which later went bankrupt. This transaction went sour, forcing Genesis to repay Gemini Earn customers. After intense internal turmoil, Genesis received the green light to commence asset redemption.

Asset Redemption Process

The $1.5 billion funds movement includes 16.6K Bitcoin worth approximately $1.1 billion and 166.3K Ethereum valued at $521.1 million. Notably, a transfer of Ethereum worth over $126 million occurred earlier on Friday.

The company transferred 27,500 ETH (valued at about $87.09 million) to an address starting with 0xcbCF. Additionally, it moved 12,500 ETH (worth roughly $39.59 million) to another address beginning with 0x72FE. This also appeared to be for the liquidation process.

Besides Genesis, Mt Gox also commenced creditor repayments last month. However, a creditor complained about not receiving his funds. On the Mt Gox insolvency subreddit, users detailed their intention to file a lawsuit. 

They discovered their claims for Bitcoin held on the defunct exchange might become void due to non-response to creditor notifications. One user claimed he was unaware of the ongoing creditor processes. Unfortunately, Mt Gox reportedly stated that he waived his right to recover funds due to his lack of response.

Implications and Next Steps

Based on all the signs, it looks like Genesis’s repayment procedure might start soon. This action represents a critical milestone in addressing the financial chaos brought on by the interrelated bankruptcy in the cryptocurrency industry.

It also emphasizes how crucial it is to communicate openly and promptly with creditors throughout the insolvency process. Therefore, Genesis Global’s proactive stance may establish a standard for similar situations in the cryptocurrency sector in the future.

Consequently, Genesis Global’s $1.5 billion asset movement marks a significant milestone. It underscores the need for robust financial practices and accountability in the crypto. As the repayment process unfolds, stakeholders will closely monitor the outcomes. The industry can learn valuable lessons from these developments, ensuring better risk management and investor protection in the future.