Three Arrows Capital Owes Genesis Trading $2.36B – Report

Summary:

Genesis Trading allegedly lent Three Arrows Capital $2.36 billion.
Estimates had earlier put Genesis Trading’s losses due to exposure to Three Arrows Capital in the ‘hundreds of millions.’
Three Arrows Capital’s bankruptcy claims have halted Genesis Trading’s attempts to recover the funds from Three Arrows Capital.

The crypto lending firm Genesis Trading allegedly lent the embattled crypto hedge fund Three Arrows Capital a total of $2.36 billion.

According to a recent report, Three Arrows Capital has an outstanding loan balance of $2.36 billion provided by Genesis Trading.

In addition, the loan was undercollateralized, and Genesis Trading had tried to recover some of its funds through an arbitration process through the American Arbitration Association (AAA) in New York. However, the recent bankruptcy filing by Three Arrows Captial, also in New York, halted the arbitration process as well as the liquidation order from a British Virgin Islands court.

In addition, Three Arrows Capital had backed the loan with 17,443,644 Grayscale Bitcoin Trust (GBTC) shares; 446,928 Grayscale Ethereum Trust (ETHE) shares; 2,739,043.83 Avalanche (AVAX) coins; and 13,583,265 NEAR Protocol coins.

A $2.36 billion hole is in contrast to reports in late June that Genesis Trading suffered ‘nine figure’ losses due to exposure to Three Arrows Capital and Babel Finance. Genesis Trading CEO, Michael Moro, was quoted in late June as stating that the company had moved on from its losses. He said:

Genesis can confirm that we carefully and thoughtfully mitigated our losses with a large counterparty who failed to meet a margin call to us earlier this week. No client funds are impacted. We sold and/or hedged all of the liquid collateral on hand to minimize any downside.

A spokesperson of Digital Currency Group, the parent company of Genesis Trading, recently confirmed to TheBlock that both companies had strong balance sheets with no remaining exposure to Three Arrows Capital.

Su Zhu Files $5 Million Claim Against Three Arrows Capital.

Earlier today, it was revealed that Su Zhu had filed a $5 million claim against Three Arrows Capital. According to crypto-twitter community member Soldman Gachs, Mr. Zhu, who is also the co-founder of the hedge fund, has somehow lodged a claim as a creditor despite being relatively quiet from Twitter.

I’ve just seen the list of creditors to #3AC and noticed that @zhusu has filed a claim for $5 million. While being on the run, he has somehow found the time to diligently and ruthlessly fill out forms to pursue a claim against his own Fund. https://t.co/YFfWmYZOoM

— Soldman Gachs ⌐◨-◨ (@DrSoldmanGachs) July 18, 2022