Genesis Trading, BlockFi, FTX, Deribit and BitMEX Liquidate Amid Three Arrows Capital Insolvency Issues

Genesis Trading is the latest crypto firm to announce they have liquidated funds from a “large counterparty” amid increasing panic and volatility in the market, via a series of tweets from the company’s CEO, Michael Moro. 

“Genesis can confirm that we carefully and thoughtfully mitigated our losses with a large counterparty who failed to meet a margin call to us earlier this week,” Moro’s tweets read. “No client funds are impacted. We sold and/or hedged all of the liquid collateral on hand to minimize any downside.”

This is just the latest liquidation proclamation, as FTX, Deribit and BitMEX have all announced liquidating from 3AC. The Block reported that 3AC owes about $6 million to BitMex, while it is unclear how much money the other firms are owed. 

While Moro didn’t specify which “large counterparty” they liquidated funds from, there is a high chance that Three Arrows Capital (3AC) was that counterparty, after a report came out Wednesday suggesting they received $400 million in liquidations from undisclosed crypto lending firms. 

Not only did 3AC receive liquidations from firms, but they also invested at least $200 million in the Terra Network, according to co-founder Kyle Davies in an interview he did with the Wall Street Journal. The Terra Network’s two cryptocurrencies, UST and LUNA, crashed starting on May 9, where both coins lost 99% of their value in the matter of a few days, according to Bitpush Terminal data. 

Davies noted that while they were able to handle the crash, the ensuing turmoil in the market caused more challenges than they were able to rally from. As a result, they are looking at selling assets, among other options to save their company.

The Genesis Trading announcement comes in a similar way to BlockFi’s Thursday message from their CEO, Zac Prince. 

“BlockFi can confirm that we exercised our best business judgment recently with a large client that failed to meet its obligations on an overcollateralized margin loan,” Prince tweeted. “We fully accelerated the loan and fully liquidated or hedged all the associated collateral.” 

Author: Tyler Irvin

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