Genesis Faces ‘Hundreds of Millions’ in Losses as 3AC Exposure Swamps Crypto Lenders: Sources

The losses come as the collapse of Three Arrows Capital sends shockwaves across the crypto lending industry, with numerous firms facing substantial losses from their exposure to the fund.

The precise tally of Genesis’ losses may not be known for some time because the company is seeking at least partial repayment from its counterparties and some of the losses may have been offset by hedging, sources said. Amid such uncertainty, Genesis has been pulling credit lines from counterparties left and right, according to a fourth market source.

Genesis, which is owned by Digital Currency Group (DCG), also the owner of CoinDesk, issued the following statement from CEO Michael Moro:

“As we already stated on June 17, we mitigated our losses with a large counterparty who failed to meet a margin call to us. We sold collateral, hedged our downside, and moved on. Our business continues to operate normally and we are meeting all of our clients’ needs.”

Neither Babel Finance nor Three Arrows Capital responded to requests for comment.