Genesis Lent $2.4 Billion to Hedge Fund Three Arrows Capital
Crypto brokerage’s parent company, Digital Currency Group, filed claim for $1.2 billion
Digital Currency Group Inc., the cryptocurrency conglomerate that owns Genesis Global Trading Inc., is the biggest creditor of the beleaguered hedge fund Three Arrows Capital Ltd., according to court documents compiled by Three Arrows’s liquidator.
DCG’s Genesis Asia Pacific Ltd. lent Three Arrows $2.4 billion, the court document said. The hedge fund put down the equivalent of $1.2 billion in crypto and other collateral as of last month.
Three Arrows, founded in 2012 by Su Zhu and Kyle Davies, was ordered into liquidation last month after creditors sued the hedge fund for failure to repay debts. The hedge fund suffered heavy losses in recent months amid a broad selloff in cryptocurrencies.
The court documents released Monday provided the most comprehensive look at creditors to Three Arrows yet. The filing named more than two dozen entities that in total had lent $3.5 billion worth of dollars and crypto assets to Three Arrows, as of Monday’s market value, though some of those loans might have been partially repaid.
The court records also underlined the difficulties that Three Arrows’s creditors and its court-appointed liquidators have faced in connecting with Messrs. Zhu and Davies, and raised concerns that the founders had used their firm’s funds on extravagant personal expenses.
Mr. Zhu recently put a house he bought for $35 million in December on the market. The property is “one of the most prestigious forms of housing” in Singapore, Charles McGarraugh, chief strategy officer of Blockchain.com, wrote in an affidavit, citing media reports.