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Fairfax County, Virginia Pension Funds Exposed to Genesis Bankruptcy

Genesis Global Holdco LLc, the parent company of cryptocurrency lender Genesis Global Capital and CoinDesk’s sister company, filed for Chapter 11 bankruptcy protection late Thursday due to its exposure to collapsed hedge fund Three Arrows Capital and crypto exchange FTX. Genesis owes over $3.5 billion to its top 50 creditors – and one of the creditors has ties to a $6.8 billion pension fund system in Fairfax County, Virginia.

The list of creditors in the bankruptcy filing included the New Finance Income Fund from global asset manager VanEck with a $53 million claim against Genesis. The fund launched in Dec. 2021 with a strategy of forming short-term lending arrangements with digital asset entities to achieve high yields, according to VanEck’s website. Last July, VanEck made headlines when two of the funds in the $6.8 billion Fairfax pension system – the Fairfax County Employees’ Retirement System and the Fairfax County Police Officers Retirement System – invested a combined $35 million in the fund as part of a then-new yield strategy, which also included an investment in Parataxis Capital.

The Fairfax County Police Officers Retirement System, led by Chief Investment Officer Katherine Molnar and managing about $1.8 billion as of last summer, has invested in the crypto industry since 2019 – a notable and extremely rare step for pension funds. Prior investments have included a $50 million commitment in Morgan Creek’s blockchain fund.

CoinDesk reached out to Molinar for comment but had not received a response by publication time.

Read more: Crypto Lender Genesis Global Capital Is FTX’s Largest Unsecured Creditor

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