Owned by Digital Currency Group cryptocurrency Genesis Asia Pacific Pte Ltd, a division of the lending company, has lent $2.36 billion to collapsed hedge fund Three Arrows Capital (3AC).
Earlier reports had indicated that Genesis was facing a potential nine-figure loss due to 3AC exposure, but the exact size of the debt has not been disclosed until now.
Bankrupt Cryptocurrency Company Three Arrows Capital Owes Genesis $2.36 Billion
According to the data obtained, the bankrupt company Three Arrows Capital owes Genesis $2.36 billion.
The documents also show that the loan was undercollateralized and Genesis sought to recover some of its loans by filing arbitration proceedings against 3AC through the American Arbitration Association (AAA) in New York last month.
However, Genesis appears to have halted the arbitration process after consulting firm Teneo was appointed to oversee the dissolution of 3AC in late June. 3AC filed for Chapter 15 bankruptcy on July 1 in New York.
A spokesperson for the Digital Currency Group (DCG) said in a statement:
“Both DCG and Genesis balance sheets remain strong. With no exposure to Three Arrows Capital, Genesis continues to be well-capitalized and operating as usual.”
Details of 3AC’s debts emerged in a 1,157-page legal document posted online Monday by firm Teneo, which was appointed last month to oversee 3AC’s liquidation.
The document outlines claims against 3AC, which filed for Chapter 15 bankruptcy in New York, days after a court in the British Virgin Islands appointed Teneo as its liquidator.
In a June 15 letter to AAA, Genesis alleged that 3AC violated two loan agreements signed in January 2019 and January 2020.
The documents refer to Genesis’ request for $1.1 billion of “unpaid unsecured debts” to be held hostage pending arbitration. This request now belongs to Digital Currency Group, not Genesis.
According to the documents, 3AC was roughly $462 million behind collateral requirements as of June 15.
bitcoin and with the fall in crypto prices, some companies were unable to pay their debts.
*Not investment advice.