Crypto hedge fund, Three Arrows Capital, popularly known by the nickname 3AC, according to court documents, owed 27 crypto companies $3.5 billion. The court documents were published by 3AC’s liquidators.
The largest creditor on the list is Genesis, a unit of the brokerage subsidiary of Digital Currency Group (DCG), which had lent $2.3 billion to 3AC. This accounts for approximately 65% of the total debt of 3AC. Voyager Digital LLC, which recently filed for bankruptcy, follows Genesis with a loan of more than $685 million to 3AC in the form of Bitcoin and Ether.
Other high-profile creditors of 3AC include DRB Panama Inc., the parent company of crypto exchange Deribit, which lent 1,300 BTC and 15,000 ETH, worth around $51 million at current prices; Celsius Network (which lent around $75 million in USDC); CoinList Services ($35 million in USDC) and FalconX ($65 million).
What you should know
- The details of the 3AC loans were publicly uploaded online on Monday by Teneo, the firm appointed last month to oversee 3AC’s liquidation. The document outlines claims against 3AC, which filed for Chapter 15 bankruptcy in New York a few days after a court in the British Virgin Islands appointed Teneo as liquidator.
- Genesis CEO, Michael Moro recently said that its parent company, DCG, had taken on some of Genesis’ liabilities. 3AC had grown into one of the crypto industry’s biggest hedge funds before May’s collapse of the Terra ecosystem left it facing significant losses.
- A spokesperson for DCG explained to The Block that despite this crisis, the balance sheet of its company as well as its subsidiaries is strong. It reads, “Both the DCG and Genesis balance sheets remain strong. With no remaining exposure to Three Arrows Capital, Genesis continues to be well-capitalized and its operations are business as usual.”
- The creditors in the bankruptcy proceedings of 3AC are seeking the return of their funds. Shockingly, also included among creditors are 3AC’s co-founder Zhu Su, who is seeking $5 million, and 3AC’s co-founder Kyle Davies’ wife Chen Kelly, who is seeking $65 million.
Some of the companies had collateral in the form of bitcoin, other crypto tokens or shares in the Grayscale Bitcoin Trust. Other creditors listed in the documents include SBI Crypto, Equities First Holdings, Tower Square Capital, Ashla International Inc, Plutus Lending LLC (aka Abra), Moonbeam Foundation, Moonbase One and PureStake.