The leading institutional trading firm Genesis Trading finally unveiled that it was indeed exposed to hedge fund Three Arrows Capital (3AC).
Last month, Genesis Trading liquidated “a large counterparty” but did not mention the company, but the community was 100% sure that Genesis is referring to Three Arrows Capital which has filed for Chapter 15 bankruptcy
Genesis Trading’s CEO, Michael Moro, indicated at the time that the company had carefully and methodically minimized losses with the significant counterparty referenced, which has since been identified as Three Arrows Capital.
Moro noted in a Twitter thread that the weighted average margin requirement for loans to 3AC was over 80%. When they were unable to meet the margin call criteria, Genesis sold the collateral right away to protect against potential losses.
Since then, Genesis is working with its parent firm Digital Currency Group to develop the best plan for further isolating the risk.
To make sure the company has the resources to run and develop its business in the long run, DCG has taken over some of Genesis’ liabilities to 3AC.
Genesis Trading is also constantly exploring all available options to make up for any possible residual losses.
Moro concluded the thread by saying “Since our founding in 2013, Genesis has successfully navigated periods of intense market volatility. Looking ahead, we will continue to support the needs of our clients and counterparties as we enter the next phase of the industry’s evolution.”
