Genesis Trading lent $2.36 billion to 3AC
The list of 3AC creditors is getting longer. Some of the prominent names are BitGo, Voyager Digital, Algorand, DeFiance, Celsius, BlockFi, SBI Crypto, Moonbeam Network, Blockchain.com… Many of them have filed for bankruptcy protection or M&A. The latest name on the list is Genesis Trading from Digital Currency Group (DCG).
According to 1,157-page court filings uploaded by Teneo, it appears that Genesis Trading has loaned 3AC up to $2.36 billion. Teneo was the firm appointed to oversee 3AC’s liquidation. Based on the data in the file, Genesis Trading’s loan was not fully collateralized.
According to Genesis CEO Michael Moro, 3AC’s loans have an average escrow requirement of over 80%. However, 3AC was unable to meet this level, prompting Genesis to sell the collaterals. As of June 15th, 3AC was short $462 million on its collateral requirements. The hedge fund’s collateral includes 17,443,644 GBTC shares; 446,928 ETHE shares; 2,739,043.83 AVAX; and 13,583,265 NEAR.
In mid-June 2022, Genesis Trading sued 3AC in court but then stopped after successfully appointing the consulting firm Teneo to oversee the hedge fund liquidation. Soon after, 3AC filed for Chapter 15 bankruptcy in the Southern District of New York on July 1.
Will Genesis Trading also go bankrupt?
$2.36 billion is a large amount of money, which can affect significantly a company’s operations.
However, when considering the current performance of Genesis Trading and DCG, it seems that this debt does not cause as many negative impacts as we thought.
Despite the market turmoil, in Genesis’s report, the company generated more than $44.3 billion in loans during Q1/2022, increasing the accumulated amount since its founding in 2018 to $195 billion. Loan outstanding balance also increased to $14.6 billion at the end of the quarter, up 17% compared to late 2021.
A spokesperson for DCG also reassured that everything is stable for both DCG and Genesis. They confirmed that they are no longer trading with 3AC.
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