Genesis Faced Huge Losses, for 3AC’s Risk Exposure Overwhelmed Crypto Lenders

It is said that the trading giant under DCG has suffered nine digit losses, partly due to the risk exposure to Three Arrows Capital and Babel Finance.

According to three people familiar with the matter, the cryptocurrency market maker and loan company Genesis trading are facing potential losses of “hundreds of millions”.

One of them said that the losses of Genesis was partly related to the risk of over leveraged hedge fund Three Arrows Capital and Babel Finance, a cryptocurrency lender in Hong Kong, which was about “hundreds of millions of dollars”.

Many Companies are Facing Huge Losses

The collapse of Three Arrows Capital has impacted the entire cryptocurrency lending industry. Many companies are facing huge losses due to their cooperation with the fund. Therefore, these losses have occurred.

People familiar with the matter said that the exact figure of Genesis’ losses may not be known for a period of time because the company is seeking at least partial reimbursement from its counterparties, and some losses may have been offset by hedging. According to the fourth market source, in this kind of uncertainty, Genesis has been drawing credit lines from its counterparties, finding both ways.

Following the high-profile disintegration of cryptocurrency companies such as Terraform Labs, Celsius and Three Arrows Capital, a series of liquidation actions have also taken place on many different cryptocurrency lending and trading platforms, thanks to the overall collapse of the value of cryptocurrency.

In particular, the impact of Three Arrows Capital has been widely felt. Shares of cryptocurrency broker Voyager plummeted and was forced to limit withdrawals because it announced that the hedge fund had defaulted on loans worth about $670million. Other companies, including BlockFi, are believed to face similar challenges.

Genesis previously admitted that it had been hit by the bear market, but did not give any figures. The company “carefully and thoughtfully mitigated our losses with a large counterparty who failed to meet our margin requirements,” CEO Moro tweeted in mid June.