Crypto 360°

Wednesday, 4 January 2023

In July 2022 Three arrows capital went bankrupt and with that Genesis lost 1.1 Billion dollars and therefore was unable to meet their liabilities to borrowers. Genesis became insolvent as of that date.

Source: https://www.coindesk.com/business/2022/07/01/three-arrows-capital-files-for-bankruptcy-in-new-york-tied-to-british-virgin-islands-proceeding/

DCG issued a piece of paper stating that in June 2032 they will supply $1.1 Billion dollars and repay borrowers. So Genesis is still insolvent with a promise on a piece of paper that if DCG wins billions in the lottery in 10 years, borrowers may get repaid. If not its just a piece of paper with the number $1.1 Billion written on it and DCG will just default on their IOU.

Source: https://twitter.com/TradFiWhale/status/1595235832297914369/photo/1

The issue is that even though Genesis was insolvent, they used this piece of paper with the numbers $1.1 Billion on it to continue taking loans from new lenders despite being completely insolvent.

Genesis took 575M of user funds and lent real money to their parent company DCG (unlike the fake 10 year IOU they received), who took this money straight to the casino and gambled it all on crypto. If they win their gamble, they repay, if they lose they just go bankrupt. No downside for DCG , just an upside with other peoples’ money.

So in effect a completely bankrupt company with 1.1B of debts that they cannot repay, managed to scam an additional 575M of funds and give it to their parent company, so they could gamble it all on insanely high risk gambles that will multiply their money or lose everything.

All new lenders since july 2022 were scammed since Genesis was missing 1.1B. They then gave away an additional 575M as a long term loan to their parent company. So now 1.675B is missing, as if the original 1.1B since july wasnt bad enough. This was an intentional scam similar to the FTX scam where they took all user funds, wrote an IOU backed by FTT and then gambled it all away. In this case the IOU isnt even backed by anything at all , its just a piece of paper that was used to stall so Genesis could get more new loans.

submitted by /u/FearlessEggplant3036
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source https://www.reddit.com/r/btc/comments/102hws6/once_genesis_lost_11_billion_in_july_2022_the/