Genesis Reportedly Lent $2.36 Billion to Three Arrow Capital

Genesis Global Trading – a crypto prime brokerage firm – reportedly credited the now insolvent Three Arrows Capital (3AC) with $2.36 billion in under collateralized loans.

As reported by The Block, details on 3AC’s loans were gleaned from a 1,159-page document uploaded by the advisory firm Teneo on Monday. However, the link to that filing appears to be down, as of writing.
The filing reportedly shows that Genesis tried to recover some of its losses using arbitration proceedings against 3AC last month.
However, the arbitration proceeding was paused after Genesis recruited Teneo to assist with 3AC’s liquidation in late June.
The document also showed some details regarding 3AC’s collateral. It included 17,443,644 shares of Grayscale’s Bitcoin Trust, 446,928 shares of Grayscale’s Ethereum Trust, 2,739,043.83 AVAX, and 13,583,265, NEAR.
As of June 15th, 3AC was short $462 million on its collateral requirements.
Genesis CEO Michael Moro confirmed in June that the firm had mitigated its losses with “a large counterparty who failed to meet a margin call” However, neither the name of the counterparty nor the exact figure for its losses were given.
Later, Moro confirmed that the counterparty was 3AC and that its loans to the fund had a weighted average margin requirement of 80%.
“Once they were unable to meet the margin call requirements, we immediately sold collateral and hedged our downside,” he said at the time.
Furthermore, Genesis’s parent company Digital Currency Group (DCG) assumed some of Genesis’s liabilities to help it continue to operate.
As of Monday, Genesis’s parent company Digital Currency Group filed a $1.2 billion liquidation request against 3AC.
3AC filed for bankruptcy at the start of July.

Leave a Reply

Your email address will not be published. Required fields are marked *