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Crypto Lender Genesis Lent $2.3B to Now Bankrupt Three Arrows Capital
Summary: Genesis, a crypto lender owned by Digital Currency Group (DCG), lent $2.36 billion to Three Arrows Capital (3AC), a crypto hedge fund that recently filed for Chapter 15 bankruptcy in New York, according to The Block. While the crypto lender tried to recover funds through arbitration in New York, those proceedings were halted after the ...
Genesis, a crypto lender owned by Digital Currency Group (DCG), lent $2.36 billion to Three Arrows Capital (3AC), a crypto hedge fund that recently filed for Chapter 15 bankruptcy in New York, according to The Block.
While the crypto lender tried to recover funds through arbitration in New York, those proceedings were halted after the appointment of liquidators Teneo in July.
Earlier reports confirmed speculation that Genesis had “significant” exposure to 3AC, but there were no definitive numbers until now. On July 6, Genesis CEO, Michael Moro sent out a series of eight tweets updating his users and the crypto community on the 3AC exposure.
He said, “Once they [3AC] was unable to meet the margin call requirements, we immediately sold collateral and hedged our downside.”
According to the report, both Genesis and the DCG remain strong despite their exposure to 3AC. It also noted that Genesis and DCG are no longer exposed to the crypto hedge fund.
Until a few months ago, 3AC was reputed as one of the strongest investment firms in the industry. However, since their exposure to the Terra Network, which collapsed in May, they have been experiencing serious insolvency issues, which eventually led to their bankruptcy filing.
Since then, reports have surfaced that co-founders, Su Zhu and Kyle Davies, have not been made available to help the liquidators, Teneo, with their work. Zhu then broke his long twitter silence saying that his cooperation with liquidators was met with baiting.
That was then followed by a New York court granting permission for Teneo to serve subpoenas to 3AC and other firms with pertinent knowledge of the situation.
Author: Tyler Irvin
Tags: bankruptcy,Digital Currency Group,Genesis,Three Arrow Capital
Link: Crypto Lender Genesis Lent $2.3B to Now Bankrupt Three Arrows Capital [Copy]