Genesis Trading says it liquidated position of ‘large counterparty’ amid Three Arrows controversy

Michael Moro, CEO of crypto lending and trading firm Genesis, said Friday that the firm had liquidated the collateral of a “large counterparty” — all but confirming its connection to Three Arrows Capital, the crypto firm at the center of a growing controversy.

“Genesis can confirm that we carefully and thoughtfully mitigated our losses with a large counterparty who failed to meet a margin call to us earlier this week,” Moro wrote. “No client funds are impacted. We sold and/or hedged all of the liquid collateral on hand to minimize any downside.”

Moro didn’t name Three Arrows directly, taking a similar approach to BlockFi CEO Zac Prince, who shared a similar message on Thursday. The Financial Times had reported the connection between BlockFi and Three Arrows previously, identifying the crypto lender as one of Three Arrows’ lenders.

The Block reported earlier this week that Three Arrows was facing possible insolvency after being liquidated to the tune of hundreds of millions of dollars worth of crypto. On Friday, The Block further reported that FTX, Deribit and BitMEX had also moved to liquidate positions held by Three Arrows.

The firm is considering asset sales and other options, per the Wall Street Journal.

In his tweet thread, Moro went on to say that “[w]e will actively pursue recovery on any potential residual loss through all means available, however our potential loss is finite and can be netted against our own balance sheet as an organization. We have shed the risk and moved on.”