What happened: Embattled crypto lender Genesis has filed for Chapter 11 bankruptcy protection. Now, the firm has made a series of transfers to crypto exchanges, suggesting that it could be looking to liquidate its assets. 

A few hours after the firm announced its bankruptcy filing, blockchain security firm PeckShield alerted users to high-value transfers made by Genesis Trading’s OTC desk.

 How much was transferred: The wallet address associated with Genesis transferred 75,000 ETH worth $113.7 million and $3.9 million in USDT to crypto exchanges Coinbase, Bitstamp and Kraken. The same wallet also moved $36 million in USDC to a new address.

Should we be worried? Typically, there’s only one reason why an entity sends a bulk of tokens to an exchange – to sell them.

“This Genesis liquidation event would be the same as 2.5 weeks of pre-merge inflationary sell pressure,” wrote one user on Twitter, which was rife with speculation that Genesis plans to sell everything

While the transfers warrant some cause for concern, no large sell volume was observed on any of these crypto exchanges at the time of writing. Bitcoin was trading at around $21,000 and appeared relatively stable. 

Genesis owes creditors $3.5 billion: The firm has more than 100,000 creditors, of which the 50 largest ones are owed more than $3.5 billion, as per bankruptcy filings published on Thursday.

 The filings show that Genesis owes Gemini $766 million, Mirana $151.5 million and MoonAlpha Finance $150 million.

https://twitter.com/HsakaTrades/status/1616305749075927040

 

Genesis said it was working on a roadmap to an exit as part of its bankruptcy proceedings that involves the creation of a trust that will distribute assets to creditors.”

 The firm’s interim CEO Derar Islim also said that Genesis had made significant progress in refining its business plans to remedy its liquidity issues. Islim has deleted his account on Twitter.