The Three Arrows Capital-Genesis Loan: What We Know

Three Arrows Capital has not openly announced the money borrowed from the DCG-held Genesis.

Michael Moro, the CEO of Genesis Trading, tweeted that the cryptocurrency lender and broker had mitigated its losses after it revealed that it was exposed to bankrupt hedge fund Three Arrows Capital (3AC).

  • The executive said that Genesis sold collateral and covered its downside after 3AC failed to meet a margin call in June.
  • Moro revealed that the company's loans to the hedge fund had an average margin requirement of over 80%. The total amount of these loans is not known.
  • Moro explained that Digital Currency Group, the parent company of Moro, has assumed certain liabilities of Genesis related to 3AC to ensure that it has sufficient capital to operate and scale its business for the long term.
  • Genesis had been worried about possible losses from exposure to 3AC and Hong Kong based Babel Finance.
  • The fall of the once top VC in the sector, 3AC sent shockwaves through the entire crypto market.
  • In its earlier announcement, the Monetary Authority of Singapore (MAS) said that the hedge fund had provided misleading information to the regulator and exceeded a threshold of assets under management (AUM) allowed for registered fund management companies (RFMCs).
  • After 3AC missed a $657 million debt repayment deadline, one of the brokerage firms that suffered the most was Voyager. It declared bankruptcy a few weeks after giving 3AC an ultimatum.
  • The loan book of Voyager, a lender based in the United States, has 58% of its loans to 3AC.