It’s unclear how bad things will get, however. Genesis, according to Silbert, is facing a liquidity issue but is not insolvent. Putting aside the $175 million Genesis lost in an FTX trading account, the lending company’s real problems stem from the early days of the crypto contagion, when one of its largest clients, the now-defunct hedge fund Three Arrows Capital (3AC), filed for bankruptcy. Genesis filed a $1.2 billion claim against 3AC, and may have loaned the hedge fund upwards of $2.36 billion, according to a court filing. It’s likely to get a fraction of that back in the 3AC bankruptcy process.