A Genesis creditor conducted a large Ethereum sale, signaling a crucial development in the ongoing liquidation process. This creditor is the largest recipient of the Genesis Trading bankruptcy proceedings.
Ongoing Ethereum Transfers and Market Impact
According to data from Arkham Intelligence, the creditor sold 12,100 Ethereum (ETH), valued at $31.43 million, in just three days. This sale came after Genesis Trading repaid the creditor in August.
Genesis creditor already sold 12,100 ETH amid major liquidationhttps://t.co/S7fPQDF2yf#GenesisTrading #Bankruptcy #CryptoSellOff #MarketUncertainty #Liquidation #Crypto #Ethereum #NBTC pic.twitter.com/9f3bxAjxoU
— NBTC (@NBTC_finance) September 26, 2024
The creditor, which received a massive allocation of 114,502 ETH, valued at $358.19 million, on August 2, began selling off part of its assets on September 23. The creditor initiated transactions with FalconX, an institutional crypto brokerage, transferring a large portion of its Ethereum holdings.
The sale of Ethereum by the creditor came in multiple phases, beginning with smaller transfers. Over the course of three days, between September 23 and September 25, a total of 12,100 ETH was moved to FalconX. The largest of these transfers, 7,099 ETH worth $18.56 million, occurred on September 25.
Some market observers believe the selling pressure exerted by such a large transaction could potentially influence Ethereum’s short-term market trajectory, especially given the uncertain market conditions.
The sale also reflects broader market movements that have been affecting Ethereum. Between September 17 and 21, Ethereum saw a price spike, but its momentum has since stabilized into sideways trading. At press time, Ethereum trades at $2,634, up by 0.80% in the last 24 hours.
Experts speculate that large transactions like those made by the Genesis creditor might cause temporary dips or further volatility in Ethereum’s price as investors react.
Genesis Liquidation Process
The Ethereum sell-off is coming amid Genesis Trading’s liquidation process after filing for Chapter 11 bankruptcy in 2023.
The crypto lender had filed for bankruptcy primarily due to financial distress caused by its exposure to the collapses of Three Arrows Capital (3AC) and FTX. 3AC’s default on a $2.4 billion loan and its substantial ties to FTX greatly impacted Genesis’s liquidity.
Other factors, such as liquidity issues, regulatory scrutiny, and the overall crypto market decline, also contributed to the lender’s decision to file for Chapter 11 bankruptcy.
Genesis owes several creditors around $3.4 billion, including Gemini, Bybit’s Miramar, Decentraland, and VanEck. The company is now on the verge of distributing $4 billion in assets to creditors during its bankruptcy restructuring.
Recovery rates vary, with Bitcoin creditors receiving about 51.28%, Ethereum creditors 65.87%, and stablecoin holders 100%. Genesis has also set up a $70 million litigation fund to pursue legal actions against third parties, including its parent company, Digital Currency Group (DCG).
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