Earlier this month, Singapore-based cryptocurrency hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy. In the legal filings, they stated that “the Debtor’s business has collapsed in the wake of extreme fluctuations in cryptocurrency markets” and “the Debit commenced a liquidation processing before the BVI Court” on June 27th, 2022.
Earlier reports by CoinDesk had stated that market-maker and lending firm Genesis faced a potential nine-figure loss from its exposure to 3AC, but the exact size of the debt, $2.36 billion, had not been reported until now.
Documents show that the $2.36 billion outstanding loan balance was uncollateralised debt.
The loan provided to 3AC had a margin requirement of over 80%, and it sold collateral when 3AC failed to maintain the requirement. Later, Genesis attempted to recover its outstanding debt through arbitration in New York.
The details of the 3AC loans were revealed in a 1,157-page legal document uploaded online on Monday by Teneo, the firm appointed to oversee 3AC’s liquidation.
Documents obtained by The Block show that 3AC was approximately $462 million short of its collateral requirements as of June 15th.
Before its collapse, 3AC was seen as one of the most renowned cryptocurrency investment firms, backing countless projects and developers.