Genesis CEO Michael Moro confirmed on Wednesday that the crypto brokerage firm had been affected by the bankrupt hedge fund Three Arrows Capital (3AC).
Genesis sold collateral and hedging when 3AC was unable to meet margin requirements on the loan, Moro said in a series of tweets.
On June 18, Moro revealed that a counterparty failed to meet Genesis’s margin call, which was confirmed as 3AC.
Bankruptcy is continuing to emerge as more crypto brokerages and lending platforms reveal losses, with Voyager Digital Ltd. filing for bankruptcy on Wednesday.
The size of Genesis loans or related losses has not been disclosed, but Moro added that Digital Currency Group, G4enesis’ parent company, takes on some of the debt to ensure continued operations.
Genesis’s exposure to 3AC and Hong Kong-based lender Babel Finance could cost the company “hundreds of millions of dollars.”