A Genesis creditor has conducted a major sale of Ethereum, signaling a key development in the ongoing liquidation process. This creditor is the largest recipient of Genesis Trading’s bankruptcy proceedings.
According to data from Arkham Intelligence, the creditor sold 12 , 100 Ethereum (ETH) worth $31.43 million in just three days. This sale came after Genesis Trading paid the creditor in August.
The creditor, which received a massive allocation of 114, 502 ETH worth $358.19 million on August 2, began selling some of its assets on September 23. It initiated transactions with FalconX, an institutional cryptocurrency broker, transferring a significant portion of its Ethereum holdings.
The creditor’s sale of Ethereum proceeded in several phases, starting with smaller transfers. Over the course of three days, from September 23 to 25, a total of 12,100 ETH were transferred to FalconX. The largest of these transfers, 7099 ETH worth $18.56 million, took place on September 25.
Some market observers believe that the selling pressure exerted by such a large transaction could potentially affect Ethereum’s short-term market trajectory, especially given the uncertain market conditions.
The sale also reflects broader market movements that have affected Ethereum. Between September 17 and 21, Ethereum experienced a price spike, but its momentum has stabilized and it is currently in a sideways movement. Experts speculate that large transactions, such as those by creditor Genesis, could cause temporary declines or further volatility in the Ethereum price as investors react.
Genesis liquidation process
Ethereum’s sell-off comes during Genesis Trading’ s liquidation process after filing for Chapter 11 bankruptcy in 2023.
The cryptocurrency lender filed for bankruptcy mainly due to financial difficulties caused by its exposure to the collapse of Three Arrows Capital (3AC) and FTX. 3AC ‘ s default on a $2.4 billion loan and its significant ties to FTX significantly affected Genesis’ liquidity.
Other factors, such as liquidity problems, regulatory scrutiny and a general decline in the cryptocurrency market, 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 the bankruptcy restructuring.
Recovery ratios 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 take legal action against third parties, including its parent company Digital Currency Group (DCG).
