diff --git a/pype/modules/ftrack/events/event_thumbnail_updates.py b/pype/modules/ftrack/events/event_thumbnail_updates.py
index 94783629f0..9d816a79e5 100644
--- a/pype/modules/ftrack/events/event_thumbnail_updates.py
+++ b/pype/modules/ftrack/events/event_thumbnail_updates.py
@@ -1,7 +1,16 @@
+import collections
 from pype.modules.ftrack import BaseEvent
 
 
 class ThumbnailEvents(BaseEvent):
+    settings_key = "thumbnail_updates"
+
+    # TODO remove `join_query_keys` as it should be in `BaseHandler`
+    @staticmethod
+    def join_query_keys(keys):
+        """Helper to join keys to query."""
+        return ",".join(["\"{}\"".format(key) for key in keys])
+
     def launch(self, session, event):
         """Updates thumbnails of entities from new AssetVersion."""
         filtered_entities = self.filter_entities(event)
@@ -35,10 +44,91 @@ class ThumbnailEvents(BaseEvent):
                 project_name, self.__class__.__name__
             ))
             return
+
+        self.log.debug("Processing {} on project \"{}\".".format(
+            self.__class__.__name__, project_name
+        ))
+
+        parent_levels = event_settings["levels"]
+        if parent_levels < 1:
+            self.log.debug(
+                "Project \"{}\" has parent levels set to {}. Skipping".format(
+                    project_name, parent_levels
+                )
+            )
+            return
+
+        asset_version_ids = set()
+        for entity in entities_info:
+            asset_version_ids.add(entity["entityId"])
+
+        # Do not use attribute `asset_version_entities` will be filtered
+        # to when `asset_versions_by_id` is filled
+        asset_version_entities = session.query((
+            "select task_id, thumbnail_id from AssetVersion where id in ({})"
+        ).format(self.join_query_keys(asset_version_ids))).all()
+
+        asset_versions_by_id = {}
+        for asset_version_entity in asset_version_entities:
+            if not asset_version_entity["thumbnail_id"]:
+                continue
+            entity_id = asset_version_entity["id"]
+            asset_versions_by_id[entity_id] = asset_version_entity
+
+        if not asset_versions_by_id:
+            self.log.debug("None of asset versions has set thumbnail id.")
+            return
+
+        entity_ids_by_asset_version_id = collections.defaultdict(list)
+        hierarchy_ids = set()
+        for entity_info in entities_info:
+            entity_id = entity_info["entityId"]
+            if entity_id not in asset_versions_by_id:
                 continue
 
-                continue
+            parent_ids = []
+            counter = None
+            for parent_info in entity_info["parents"]:
+                if counter is not None:
+                    if counter >= parent_levels:
+                        break
+                    parent_ids.append(parent_info["entityId"])
+                    counter += 1
 
+                elif parent_info["entityType"] == "asset":
+                    counter = 0
+
+            for parent_id in parent_ids:
+                hierarchy_ids.add(parent_id)
+                entity_ids_by_asset_version_id[entity_id].append(parent_id)
+
+        for asset_version_entity in asset_versions_by_id.values():
+            task_id = asset_version_entity["task_id"]
+            if task_id:
+                hierarchy_ids.add(task_id)
+                asset_version_id = asset_version_entity["id"]
+                entity_ids_by_asset_version_id[asset_version_id].append(
+                    task_id
+                )
+
+        entities = session.query((
+            "select thumbnail_id, link from TypedContext where id in ({})"
+        ).format(self.join_query_keys(hierarchy_ids))).all()
+        entities_by_id = {
+            entity["id"]: entity
+            for entity in entities
+        }
+
+        for version_id, version_entity in asset_versions_by_id.items():
+            for entity_id in entity_ids_by_asset_version_id[version_id]:
+                entity = entities_by_id.get(entity_id)
+                if not entity:
+                    continue
+
+                entity["thumbnail_id"] = version_entity["thumbnail_id"]
+                self.log.info("Updating thumbnail for entity [ {} ]".format(
+                    self.get_entity_path(entity)
+                ))
 
             try:
                 session.commit()