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

A cascade of liquidations at many different crypto lending and trading platforms has followed the high-profile unraveling of crypto firms such as Terraform Labs (of Terra and Luna infamy), Celsius and Three Arrows Capital, aided by a plunge in the value of cryptocurrencies across the board.

The impact from Three Arrows Capital in particular has been felt widely. Crypto brokerage Voyager saw its stock plunge and was forced to limit withdrawals as it declared the hedge fund in default on loans worth around $670 million. Others, including BlockFi, are believed to be facing similar challenges.

Genesis has previously acknowledged taking a hit in the bear market without giving any numbers. The firm “carefully and thoughtfully mitigated our losses with a large counterparty who failed to meet a margin call to us,” CEO Moro tweeted in mid-June.

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Genesis originated over $44.3 billion in loans in the first quarter of 2022. Its parent company DCG, a large crypto conglomerate rumored to have a war chest of about $1 billion, is likely to help Genesis “buffer that kind of shock,” one source said.

Other crypto lenders have enlisted deep-pocketed saviors in recent days, with FTX’s Sam Bankman-Fried making opportunistic investments in BlockFi and Voyager.

Forced deleveraging across markets has further tanked bitcoin’s price in recent days with the leading cryptocurrency currently trading hands around $20,000.

Three Arrows Capital Ordered to Liquidate After Defaulting on $670M Loan

UPDATE (June 30, 02:14 UTC): Adds that crypto lender BlockFi is believed to be in similar straights.