Three Arrows Capital (3AC) owes a whopping $3.5 billion to 27 different companies—including Blockchain.com, Voyager Digital, and lender Genesis Global Trading—according to court documents.
The details come from affidavits describing details of the bankruptcy and liquidation of the crypto hedge fund. They were filed July 7 and made public Monday by Teneo, the firm hired to oversee 3AC’s liquidation.
3AC failed to repay loans and missed multiple margin calls with lenders, according to the filings, meaning that its investment accounts fell below required levels and were not topped up.
Of that $3.5 billion total, Genesis—a company under Digital Currency Group—lent 3AC the most. It passed the now-insolvent firm $2.36 billion in a loan that was under-collateralized and had a margin requirement of 80%, according to the court documents.
The filings, which weigh in at over a thousand pages, argue repeatedly that “3AC is insolvent and should be wound up” in many different terms.
In an affidavit filed June 26, Blockchain.com’s Chief Strategy Officer Charles McGarraugh also revealed that 3AC co-founder Kyle Davies told him on June 13 that Davies tried to borrow another 5,000 Bitcoin from Genesis, which at that time had a value of about $125 million, “to pay a margin call to another lender.” Such behavior is common within a Ponzi scheme, when earlier investors are paid with funds from newer investors.
Furthermore, the filings detail the various real estate investments held under the names of 3AC co-founder Su Zhu’s child and wife, such as two residences in…