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Lending company Genesis Trading admitted it lent $3.36 billion to Three Arrows Capital, a newly bankrupt crypto investment fund.
On the evening of July 18, Teneo Restructuring, the unit designated to liquidate the assets of Three Arrows Capital (3AC), published 1,157 pages of documents submitted by creditors to claim assets from the fund. The list of 27 crypto companies/projects in this category includes Genesis Trading, Celsius, Voyager, CoinList, Galaxy Digital, SBI Crypto, BlockFi, Moonbeam, etc.
Notably, Three Arrows Capital co-founder Zhu Su also claimed to be a creditor of the fund and demanded $5 million in compensation, while the other founder’s wife, Kyle Davies, claimed $65 million.
However, the list below lacks names that have been confirmed to be involved from 3AC but may not have yet sent documents to the liquidator, such as Blockchain.com, Deribit, DeFiance Capital , BlockFi, Babel Finance, Finblox,…
3AC juice, dive into 1,000+ pages of degeneracyhttps://t.co/WtfafWV4yh
— db (@tier10k) July 18, 2022
Among them, the most prominent is Genesis Trading, a subsidiary of Digital Currency Group, the “giant” of the digital currency industry that owns the Grayscale investment fund and the CoinDesk media platform.
According to a creditor document sent to 3AC’s asset liquidator, Genesis Trading claims to have provided the fund with a $2.36 billion loan, but was not fully collateralized. This is much larger than the “9-digit” loss estimate given previously.
The collateral for the loan includes over 17.4 million shares of GBTC and 446,928 shares of GETH, two of Grayscale’s own crypto hedge fund products, and 2.7 million AVAX and 13.5 million NEAR. Genesis revealed that it sold all of 3AC’s collateral when the hedge fund was unable to meet margin call requirements.
It is not clear how much actual damage Genesis is suffering from the bankruptcy of Three Arrows Capital.
A spokesperson representing Digital Currency Group and Genesis Trading stated:
“Both DCG and Genesis still have plenty of assets. Genesis has no other relationship with Three Arrows Capital, the company will continue to operate stably and have abundant liquidity.”
As reported by CHK, Three Arrows Capital is a well-known crypto fund but suffered heavy losses after the collapse of LUNA-UST in May, followed by massive asset liquidation during the market. continued adjustment in June. This fund was found to have borrowed uncollateralized assets from a series of other entities, creating a knock-on effect that spread to Voyager, Finblox, Genesis Trading, Babel Finance, DeFiance Capital, Blockchain. com, Deribit, Kyber Network,…
On July 2, Three Arrows Capital filed for bankruptcy protection in a New York court. The fund was also previously asked by creditors to liquidate assets in the British Virgin Islands, where Three Arrows Capital is registered.
For more than a month from June 15, two fund founders, Zhu Su and Kyle Davies, were said to have “hidden” and showed an uncooperative attitude with the asset liquidator.
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