Michael Moreau, CEO of the Genesis Trading cryptocurrency OTC platform, announced the liquidation of a “major counterparty” position. He did not reveal the name of the company, but users suggested he was referring to the Three Arrows Capital (3AC) hedge fund.

3/Genesis can confirm that we have carefully and thoughtfully mitigated our losses with a major counterparty that did not comply with the margin call made to us earlier this week. No client funds are affected. We have sold and/or hedged all liquid collateral in our possession to minimize any adverse events.

– Michael Moro (@michaelmoro) 17 June 2022

“Genesis can confirm that we have carefully and deliberately mitigated our losses with a major counterparty that does not meet margin requirements. […]. Client funds were not affected,” said Moro.

Twitter users assumed that the head of Genesis Trading was talking about Three Arrows Capital.

I was trying to guess who this counter party was then I remember having 3 AC’s that needed repair recently despite their “genius” manufacturers.

— CyberAlien.eth (@cyberalien_eth) 17 June 2022

One commenter compared Moro’s message to that of BlockFi CEO Zak Prince.

https://t.co/30i8jMGp4t

almost the same description @BlockFiZac
Are these guys using the same business book?

Good luck to you both, that’s when we find out who the real deal is.

– tour (@tour_de_flaneur) 17 June 2022

Prince previously explained that the crypto lending platform had recently “made its best business decision on a large client that was unable to meet its overcollateralized margin loan obligations.” According to the Financial Times, some 3AC positions have been liquidated.

According to Moreau, Genesis Trading plans to “actively pursue recovery of potential residual losses by all available means.”

4/ We will actively recoup potential residual loss by all means available, but our potential loss is limited and can be deducted from our own balance sheet as an organisation. We took the risk and moved on.

– Michael Moro (@michaelmoro) 17 June 2022

In February 2022, Three Arrows Capital spearheaded LFG’s $1 billion LUNA token sale. In May, the Terra ecosystem collapsed and the native cryptocurrency was nearly worthless.

Back in June, there were rumors of the bankruptcy of a hedge fund, which actively uses protocols like Aave, against the background of the collapse of the cryptocurrency market.

On June 16, trading firm 8 Blocks Capital accused Three Arrows Capital of using client funds to cover margin calls.

According to some reports, cryptocurrency platforms BitMEX, FTX and Deribit have liquidated their 3AC positions due to the latter’s failure to meet margin requirements.

On June 17, hedge fund co-founder Kyle Davis said Three Arrows Capital has hired legal and financial advisors to find a solution for its investors and lenders. According to him, the structure did not cease operations.

Read on for ForkLog how Celsius, 3AC and stETH are linked and the impact of their potential bankruptcy on the market:

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