Genesis Chief Executive Officer Michael Moro confirmed on Wednesday the cryptocurrency brokerage was exposed to the now-bankrupt hedge fund Three Arrows Capital (3AC).
See related article: Three Arrows Capital files for Chapter 15 bankruptcy
- Genesis sold collateral and hedged downside once 3AC was unable to meet margin call requirements on a loan, Moro said in a series of tweets.
- Moro revealed on June 18 that a counterparty failed to meet Genesis’ margin call, which was confirmed to be 3AC.
- The snowball effect of 3AC’s bankruptcy is continuing to emerge as more exposed crypto lenders and brokers disclose losses, with the exposed Voyager Digital Ltd. filing for bankruptcy on Wednesday.
- The size of Genesis’ loans or the associated losses have not been disclosed, but Moro added the Digital Currency Group, Genesis’s parent company, assumed some liabilities to ensure continued operations.
- Unnamed sources cited by CoinDesk in a June 30 report said Genesis’ exposure to 3AC and the Hong Kong-based lender Babel Finance could lose the company “hundreds of millions.”
See related article: Three Arrows Capital lines up for liquidation