Rumors of Hundreds of Millions in Losses for Crypto Giant After Dealing with Hedge Fund

1 mins

It had been rumored that the crypto market-making and trading heavyweight suffered hundreds of millions in losses as a result of its dealings with hedge fund Three Arrows Capital.

Michael Moro, CEO of Genesis Trading, said on Wednesday that Three Arrows Capital (3AC) was the large counterparty that failed to meet a large margin call in June and forced the liquidation of the related collateral.

  • Moro said that since then, Genesis has worked with parent Digital Currency Group (DCG) to continue to isolate risk. DCG also assumes certain liabilities of Genesis related to the troubled hedge fund 3AC.
  • CoinDesk reported last week that Genesis was facing hundreds of millions in losses, thanks partly to its exposure to 3AC, and also noted the deep pockets of parent DCG as likely to help ease the pain.
  • Moro said Wednesday that the loans to 3AC had a weighted average margin requirement of 80%. Once that level was breached and no additional margin posted, Genesis sold the collateral and hedged further losses.

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