Three Arrows Capital | Genesis once borrowed $2.3 billion, claimed $1.2 billion, and a committee of five creditors has been appointed.

After the bankruptcy liquidation process of Three Arrows Capital entered judicial proceedings, financial consulting firm Teneo was appointed as the liquidator. In contrast to relying on rumors and insider information as in the past, legal documents reveal more details.

Genesis Once Provided $2.36 Billion in Loans

According to documents, 3AC, a venture capital firm, had previously lent up to $3.5 billion to 27 companies, including well-known entities like Blockchain.com, Voyager Digital, and Genesis Global Trading.

Recently, it was first claimed that significant losses from a "large trading counterparty" had been greatly mitigated, and later it was admitted that the counterparty was 3AC. Genesis emphasized that it still has sufficient capital for long-term operations and business expansion, making it a highly anticipated entity.

Genesis initially provided 3AC with up to $2.36 billion in loans, with over 80% collateral requirements. When 3AC failed to meet the conditions, Genesis sold the remaining collateral. The exact extent of the losses is currently unknown.

According to Michael Moro, CEO of Genesis, on July 6, the parent company Digital Currency Group (DCG) has taken on some of Genesis's debt. Documents show that Genesis is claiming $1.2 billion from 3AC.

Creditors' Committee Established

Previously reported, the list of creditors includes co-founder Su Zhu claiming $5 million, and another co-founder Kyle Davies's wife claiming $65 million, among others such as:

• The cryptocurrency business group DCG, which owns Grayscale Investments and media outlet CoinDesk
• The bankrupt public company Voyager
• The public blockchain Algorand
• The venture capital firm DeFiance Capital, incubated by 3AC
• The bankrupt financial lending platform Celsius
• The cryptocurrency issuance platform CoinList
• The venture capital firm Galaxy Digital, which suffered heavy losses in the LUNA incident
• SBI Crypto under the well-known Japanese financial group SBI
• The financial lending platform BlockFi, which claims to have survived a financial crisis
• The cross-chain smart contract platform Moonbeam Network

According to sources cited by The Block, the final five members of the Creditors' Committee include:

• Digital Currency Group
• Voyager
• CoinList
• Blockchain.com
• Matrixport

Insiders say that these members were selected based on the amount of debt each creditor holds, and then chosen through a voting process.

1,157 Pages of Legal Document Details

The crypto community highlighted some details from the documents, as follows:

1. Yacht Purchase: The documents cited rumors that Su Zhu and Kyle Davies ignored creditors and used borrowed funds to pay a $50 million deposit for a yacht, which will be delivered within the next two years.

2. Mansion Purchase: Su Zhu bought a $48.8 million mansion in Singapore in December last year, paying the full amount in cash without a loan.

3. Low-Interest Loans: 3AC always managed to borrow money at extremely low interest rates and without collateral due to its reputation. Since April 2020, they have made over five loans to Deribit at a 2.5% interest rate.