Genesis Joined List Of Companies To Liquidate Three Arrows Capital

Genesis joined list of companies that liquidated Three Arrows Capital and the CEO Michael Moro confirmed that the platform had exposure to the hedge fund so let’s have a closer look at our latest cryptocurrency news.

In a recent Twitter thread, Genesis CEO Michael Moro said that the counterparty that failed to meet the margin call mentioned by the crypto broker was the troubled Three Arrows Capital. He said:

“We previously stated in June that we mitigated our losses with respect to a large counterparty who failed to meet a margin call. Now that the BVI bankruptcy process has commenced, we can confirm that the counterparty was Three Arrows Capital.”

3/ The loans to this counterparty had a weighted average margin requirement of over 80%. Once they were unable to meet the margin call requirements, we immediately sold collateral and hedged our downside.

— Michael Moro (@michaelmoro) July 6, 2022

The news came hot on the heels of the court in the British Virgin Islands that ordered 3AC to liquidate the assets and the public nature of the order was in part why Moro is able to identify who the larger counterparty is. He explained that the collateral used for the loan was sold to protect the company. Much like defaulting the loan, the margin calls happen when investors that are speculating with the borrower’s money are falling in the maintenance margin. In this case, Moro said that Three Arrows Capital had a maintenance margin of the weighted average requirement of 80% which means 3AC needed to maintain this amount of value before having the collateral sold off.

Moro’s parent company Digital Currency Group took on some of the losses to make sure that Genesis has enough capital to operate for the future. This is not the first time that 3AC was founded by Kyle Davies, Su Zhu has been liquidated. After the TErra collapse, the UST stablecoin and LUNA token, 3AC emerged again as the major counterparty for a few crypto companies and it was reported that the fund fielded losses of up to $200 million and Davies said that the Terra situation caught them off guard.

Genesis joined the list of companies that entered into liquidation issues but once BTC started crashing, plenty of platforms like BitMEX, Deribit, and FTX announced they liquidated the positions after the latter filed to meet the margin calls. BLockfi and Voyager also suffered huge losses after each liquidated 3AC and BlockFi even agreed to the terms with FTX exchange and Voyager filed for chapter 11 bankruptcy.