In the days leading up to Genesis’ loan division filing for Chapter 11, around $125 million was transferred to exchanges, with additional transferred the next day.
Even when Genesis’ crypto-lending firm filed for bankruptcy, the company’s trading arm, which stayed out of Chapter 11, was still moving money around on blockchains, indicating that the business was still operating at least partly normally.
According to blockchain data collated by Etherscan, a wallet managed by the Genesis OTC trading desk delivered around $125 million in ETH, FTM, and USDT to Coinbase, Binance, Bitstamp, and Kraken on Thursday, the day of the bankruptcy filing. The wallet has transacted many times in the last few hours, receiving about $50 million USDC.
The changes are consistent with parent company Digital Currency Group’s (DCG) assurance that the Genesis trading business will “continue to operate as usual.” (DCG is also the parent firm of CoinDesk.) It’s still early, so it’s unclear how the bankruptcy of Genesis’ loan organisations would influence the spot and derivatives operations in the long run.
“Genesis’ reputation is in the trash,” said Charles Storry, head of growth at crypto index platform Phuture, in an interview with CoinDesk. “Perhaps they keep a few legacy clientele. Maybe. No likelihood of bringing new clients while the bankruptcy is in play.”
Frank Chaparro, a journalist at The Block, asked users on Twitter if they would trade with Genesis after the lending business went bankrupt. At the time of publication, 73.7% of the 938 respondents had voted “no.”
On Thursday, the OTC desk wallet transferred 50,000 ETH to Coinbase, 20,000 ETH to Bitstamp, and 5,000 ETH to Kraken. According to Etherscan, it sent an additional 7.7 million FTM worth around $2.4 million to Binance and $3.9 million USDT to Kraken.
According to Nansen.ai data, this wallet generally moves funds on weekdays, thus the Thursday transactions appeared to be routine despite the bankruptcy turmoil.
As of Friday press time, Genesis’ on-chain portfolio, which includes at least eight unique addresses, was valued $307 million. ETH accounts for 74.7% of Genesis’ portfolio, while the following six tokens – USDC, COMP, SAND, APE, MANA, and AAVE – account for 13.8%.
This sum is most likely an understatement of Genesis’ total assets. DarkFi.eth, one of the white hats that stole and later returned around $2 million from the Nomad bridge exploit in August 2022, told CoinDesk: “It is not unusual for venture firms to disguise what wallets contain their tokens.” Despite this, Genesis is the third-largest whale on Nansen’s Funds Leaderboard, after only Jump Trading and Paradigm Capital.
By press time, Genesis had not responded to a request for comment.
