A number of affidavits reveal the extent to which almost 30 crypto companies had loaned billions to 3AC. With $2.3 billion in loans to 3AC, Genesis is the largest creditor. Zhu Su, co-founder of 3AC, and Kyle Davies’ wife are both creditors.
According to documents filed today by 3AC’s liquidators, the collapsed crypto hedge fund Three Arrows Capital (3AC), owed $3.5 billion to 27 crypto companies.
Genesis Asia Pacific Pte Ltd. is the largest creditor on this list. is a brokerage subsidiary of Digital Currency Group (DCG), and had lent $2.3 Billion to 3AC. Michael Moro, Genesis CEO, recently stated that DCG had assumed some of Genesis’ liabilities.
3AC was one of the largest hedge funds in the crypto industry before the Terra ecosystem collapsed. It suffered significant losses.
The details of 3AC loans were disclosed in a 1,157-page legal uploaded online by Teneo, the firm that was appointed last month to manage 3AC’s liquidation. The Block got the document before it was made public. It details claims against 3AC. 3AC filed for Chapter 15 bankruptcy in New York just days after a British Virgin Islands court appointed Teneo as liquidator.
Today, a spokesperson for DCG told The Block that both the DCG balance sheets and Genesis balance sheets are strong. Genesis is now fully capitalized, and it continues to operate as normal .”
Voyager bankruptcy
Voyager Digital LLC filed for bankruptcy recently. It follows Genesis with a loan amounting to more than $685million to 3AC in bitcoin and ether. This amount was calculated based on current crypto prices.
DRB Panama Inc. (the parent company of crypto-exchange Deribit) was another high-profile creditor of 3AC. It lent 1,300 BTC to 15,000 ETH and approximately $75 million in USDC to Celsius Network. CoinList Services ($35m in USDC), FalconX ($65m) were also among them.
Kushagra Shrivastava (Vice President of Executive Operations and Partnerships at FalconX) declined to comment on 3AC’s loan amount, saying that he could not give details about relationships with specific customers. He did tell The Block, however, that FalconX had no material exposure or losses and that its average collateralization was over 160%.
Shrivastava referred to the Grayscale Bitcoin Trust (GBTC) as GBTC. Shrivastava said that this is unlike other major lenders in the sector.
He said: “Due strong risk management, market neutral approach and leveraging real-time on-chain analysis, FalconX emerged from the liquidity crisis stronger than ever. Our balance sheet is the biggest it has ever been. We have continued to extend credit and grown our credit business despite market conditions .”
A CoinList spokesperson said to The Block, “We lent assets from our balance sheet to 3AC, and they’ve defaulted upon that loan.” We are currently trying to recover those assets. Their default does not affect user funds. It only affects assets in our balance sheet. We raised $100 million Series A in October 2021, have years to go (even if we don’t recover any of our loaned assets), will continue to support the most important projects in crypto.
These companies are creditors in 3AC’s bankruptcy proceedings and are seeking their money back. Zhu Su, 3AC cofounder, is looking for $5 million and Kyle Davies, 3AC founder, is looking for $65 million. Chen Kelly, 3AC cofounder, is also seeking $65 million.
Some companies held collateral in the form bitcoins, crypto tokens, or shares in Grayscale Bitcoin Trust.
The documents also list SBI Crypto and Equities First Holdings as creditors.
