Digital assets broker Genesis Global Trading revealed on Wednesday that it had exposure to now bankrupt Three Arrows Capital (3AC).
CEO Michael Moro said in a Twitter thread that Genesis sold its collateral and hedged its downside once they discovered that 3AC failed to meet a margin call in June. Moro added that the firm’s loans to 3AC had a weighted average margin requirement of over 80%, but the exact details on the amount of funds loaned were not disclosed.
Digital Currency Group, which is the lender's parent company has now assumed some of Genesis’ liabilities related to 3AC. Moro said, Genesis is pursuing other strategies to recover any extra losses, he added.
“A lot of the crypto industry players are being brought to their knees,” Mark Connors, 3iQ Digital Asset’s head of research, told Blockworks in an interview. He adds, “There are going to be folks that don’t come back. There’ll be a washing-out, there’ll be a consolidation. There’ll be partnering, and there’ll be new players emerging in crypto.”