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Genesis Global Issued $2.36B in Undercollateralized Loans to Three Arrows Capital

Oliver Knight - CoinDesk
2022-07-18 17:06

Crypto prime brokerage Genesis made $2.36 billion in loans to the now insolvent Three Arrows Capital (3AC), according to a 1,157 court filing uploaded by bankruptcy trustee Teneo.

  • A list of creditor claims on the document reveals that Genesis Asia Pacific Pte Ltd, an arm of Digital Currency Group's lending business, made demands for breached 3AC loans totaling $2,360,302,065, and made in January 2019 and January 2020.
  • These loans were partially collateralized, with 17,443,644 shares of the Grayscale Bitcoin Trust (GBTC), 446,928 shares in Grayscale Ethereum Trust (ETHE), 2,739,043.83 AVAX tokens and 13,583,265 NEAR tokens – all of which have been liquidated by Genesis.
  • Genesis issued a margin call to Three Arrows Capital via the American Arbitration Association (AAA) seeking collateral to make up the shortfall. When 3AC failed to provide the required collateral, Genesis sent a notice of default stating that the entire loan balance ($2.36B) was now due.
  • Last month sources told CoinDesk that Genesis faced losses in the "hundreds of millions" due to exposure to 3AC.
  • On July 1, Three Arrows Capital filed for bankruptcy in New York.
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