Genesis Trading CEO Confirms 3AC Exposure, Parent Helps Cover Losses

Digital Currency Group's market maker and lender Genesis Trading has confirmed it has investment exposure in the now-liquidated Three Arrows Capital (3AC).

Last week, the troubled company's bankruptcy and subsequent liquidation order sent shockwaves through the cryptocurrency space amid an ongoing downturn across the crypto market. A major talking point was the stakes of other high-profile firms in the now-defunct cryptocurrency hedge fund and the ongoing implications.

Genesis Trading is one of the well-known lenders with exposure to 3AC, which has now been confirmed by the company’s CEO, Michael Moro. The company managed to mitigate its losses after 3AC failed to meet margin calls on borrowings from Genesis, the company official said.

While Moro did not disclose how much it borrowed from 3AC, he revealed the terms of the loan the firm lent to the hedge fund and the sequence of events that followed after the debtor failed to meet its repayment obligations:

“The weighted average margin requirement on loans to this counterparty exceeds 80%. As soon as they fail to meet margin calls, we immediately sell collateral and hedge our downside risk.”

Genesis Trading’s parent company, Digital Currency Group, assumed some of the responsibilities owed by 3AC to ensure that Genesis had sufficient funds to continue operating. The company will continue to explore options in an attempt to recoup losses following the 3AC debacle.

Reports have suggested that Genesis is facing losses of hundreds of millions of dollars, and the company has not disclosed details of its exposure to 3AC. Cointelegraph has reached out to the market maker for comment.

Voyager Digital was another victim of 3AC’s collapse, the cryptocurrency exchange was forced to delay transactions, deposits and withdrawals in early July after the hedge fund failed to repay 3AC’s 15,250 Bitcoin (BTC) and 350 million USDC loan to the U.S. exchange.