Blockchain data provider Arkham Research revealed on Friday that wallets associated with Genesis Trading, a cryptocurrency lender under Digital Currency Group, had transferred a significant amount of digital assets. The transfer included over 16,000 Bitcoin and 166,000 Ether, valued at approximately $1.1 billion and $521 million, respectively. This move comes as Genesis Trading begins to address its debts, indicating a potential shift in its approach following a period of financial turmoil.
The recent transfers are part of Genesis Trading’s efforts to resolve a substantial debt stemming from its collapse in 2022. The company faced financial difficulties exacerbated by its involvement with the now-defunct Gemini “Earn” crypto credit platform. Genesis had loaned assets to the bankrupt Three Arrows Capital hedge fund, impacting its operations significantly.
In May, Gemini reported that it had fully reimbursed its Earn users, clearing the way for Genesis to address its remaining financial obligations. In a court filing in January 2023, Genesis listed over $3 billion in claims against its top creditors, including Gemini, Cumberland, and VanEck’s New Finance Income Fund. The recent transaction indicates progress in repaying these creditors, potentially signaling the end of a challenging chapter for the crypto sector.
The massive cryptocurrency transfers are viewed as a significant step towards settling Genesis Trading’s extensive liabilities. The company had previously disclosed having over 100,000 creditors and potentially up to $10 billion in liabilities. The direction of the funds from the transfers remains unclear, and Genesis has not responded to media inquiries.
The situation is further complicated by a $1.1 billion promissory note issued by Genesis’ parent company, DCG, to address a balance sheet shortfall caused by losses related to Three Arrows Capital and Alameda Research. New York Attorney General Letitia James has filed a civil suit against DCG, Genesis, and others, alleging fraudulent activities and deceptive practices linked to $1 billion in trading losses.
Genesis Trading’s recent actions demonstrate ongoing efforts to resolve its financial issues in the aftermath of the 2022 crypto market crisis. The substantial transfer of assets suggests progress in its restructuring and repayment process. However, uncertainties remain regarding the final resolution of its liabilities and legal challenges.
The transfer of assets by Genesis Trading is a significant development in the cryptocurrency industry, highlighting the complexities and challenges faced by companies in the sector. As the company navigates its debt restructuring efforts, the outcome of these transfers will be closely watched by industry observers and stakeholders.