# What Specific Failures in Counterparty Due Diligence Contributed to the Archegos Losses? ▴ Question

**Published:** 2025-08-05
**Categories:** Question

---

![A precisely balanced transparent sphere, representing an atomic settlement or digital asset derivative, rests on a blue cross-structure symbolizing a robust RFQ protocol or execution management system. This setup is anchored to a textured, curved surface, depicting underlying market microstructure or institutional-grade infrastructure, enabling high-fidelity execution, optimized price discovery, and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-engineered-rfq-block-trade-execution-for-digital-asset-derivatives.jpg)

![A sleek, conical precision instrument, with a vibrant mint-green tip and a robust grey base, represents the cutting-edge of institutional digital asset derivatives trading. Its sharp point signifies price discovery and best execution within complex market microstructure, powered by RFQ protocols for dark liquidity access and capital efficiency in atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-microstructure-price-discovery-optimization-prime-os-intelligence-layer.jpg)

## Concept

The [Archegos Capital Management](https://prime.greeks.live/area/archegos-capital-management/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) collapse was a systemic event rooted in the fundamental architecture of [counterparty risk](https://prime.greeks.live/area/counterparty-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) assessment. The core failure resided in the inability of global prime brokers to perceive the aggregate risk of a single counterparty operating through a network of opaque financial instruments. Each institution viewed its exposure to Archegos in isolation, a perspective that was technically accurate within its own silo but systemically blind.

The very instruments used, primarily [total return swaps](https://prime.greeks.live/area/total-return-swaps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) (TRS), were designed to provide [leverage](https://prime.greeks.live/area/leverage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) while obscuring the ultimate beneficial owner’s total position from the broader market. This created a critical information asymmetry where Archegos maintained a complete picture of its portfolio, while its counterparties each held only a single, misleading piece.

This was a breakdown in the conceptual understanding of modern counterparty risk. The [due diligence process](https://prime.greeks.live/area/due-diligence-process/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) at several major banks operated on a model that was sufficient for a simpler, less interconnected market. It failed to account for a highly sophisticated family office deliberately structuring its activities to exploit the seams between institutional [risk management](https://prime.greeks.live/area/risk-management/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) systems. The banks’ frameworks were designed to measure the risk of the visible portion of the iceberg ▴ the collateral and the specific swaps on their own books.

The fatal flaw was the failure to design a system capable of estimating the size and shape of the submerged, invisible mass of risk distributed across multiple counterparties. The losses were a direct consequence of this conceptual gap. The systems in place were asking the wrong question. They asked, “What is our specific risk to Archegos?” The question they needed to answer was, “What is Archegos’s total risk to the system, and how much of that is concentrated in the same set of securities we are financing?”

> The collapse revealed that a counterparty’s total systemic footprint, not just a bank’s individual exposure, is the critical unit of analysis for effective due diligence.

The situation was exacerbated by Archegos’s status as a “[family office](https://prime.greeks.live/area/family-office/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite),” which exempted it from certain regulatory disclosures required of other large market participants like hedge funds. This regulatory classification, combined with the use of swaps, created a perfect storm of opacity. The [due diligence](https://prime.greeks.live/area/due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) failure was therefore twofold. It was a failure of imagination on the part of the banks, which did not adequately conceive of a counterparty accumulating such a massive, concentrated position across the street.

Secondly, it was a failure of process, where existing [risk models](https://prime.greeks.live/area/risk-models/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) and due diligence checklists were not equipped to detect or act upon the subtle signs of this systemic concentration. The [prime brokers](https://prime.greeks.live/question/what-are-the-primary-differences-in-risk-management-protocols-between-prime-brokers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) were, in essence, competing with each other to lend to the same hidden, hyper-leveraged strategy, a competition that blinded them to their collective peril.

![Sleek, intersecting metallic elements above illuminated tracks frame a central oval block. This visualizes institutional digital asset derivatives trading, depicting RFQ protocols for high-fidelity execution, liquidity aggregation, and price discovery within market microstructure, ensuring best execution on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-system-for-optimal-execution.jpg)

![Sleek metallic structures with glowing apertures symbolize institutional RFQ protocols. These represent high-fidelity execution and price discovery across aggregated liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/precision-digital-asset-derivatives-trading-systems-optimizing-rfq-protocols-for-institutional-block-trade-execution.jpg)

## Strategy

The strategic failures in [counterparty due diligence](https://prime.greeks.live/area/counterparty-due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) that led to the Archegos losses were multifaceted, stemming from a misalignment of commercial incentives, flawed risk governance structures, and a passive approach to information gathering. The prime brokerage business model, driven by intense competition for a limited pool of high-volume clients, created a strategic imperative to prioritize revenue generation over rigorous risk discipline. This manifested as a willingness to extend vast amounts of leverage with insufficient margin, effectively enabling the risk-taking behavior of clients like Archegos. The strategy was one of client acquisition and retention at the expense of a holistic risk assessment.

![A precision probe, symbolizing Smart Order Routing, penetrates a multi-faceted teal crystal, representing Digital Asset Derivatives multi-leg spreads and volatility surface. Mounted on a Prime RFQ base, it illustrates RFQ protocols for high-fidelity execution within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-digital-asset-derivatives-high-fidelity-execution-probe.jpg)

## The Flaw of the Siloed View

A central strategic error was the vertically-siloed approach to risk management. Each prime broker’s due diligence and ongoing monitoring focused almost exclusively on its bilateral relationship with Archegos. The risk models were calibrated to the collateral and swap positions held at that specific bank.

This approach failed to incorporate a strategic analysis of the counterparty’s broader market activities. A more robust strategy would have involved actively seeking information to model the counterparty’s potential aggregate positions.

This could involve:

- **Scenario Analysis Based on Market-Wide Data** ▴ Analyzing market volume and price action in the handful of stocks Archegos was known to favor (like ViacomCBS, Discovery, Tencent Music) to estimate the potential size of a single actor’s influence. A strategic due diligence framework would have tasked analysts with asking, “Who is driving the unusual activity in these specific names, and what if it’s one of our own clients operating at scale?”

- **Qualitative Due Diligence** ▴ Conducting deeper, more intrusive due diligence on the counterparty’s strategy. Instead of simply accepting Archegos’s status as a family office, a more strategic approach would involve understanding their investment philosophy, their concentration limits, and their use of leverage across all providers. The fact that [Bill Hwang](https://prime.greeks.live/area/bill-hwang/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) had a history of regulatory sanctions should have triggered a strategic review of his trading style, which was known to involve high concentration and leverage.

![A sleek, segmented cream and dark gray automated device, depicting an institutional grade Prime RFQ engine. It represents precise execution management system functionality for digital asset derivatives, optimizing price discovery and high-fidelity execution within market microstructure](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-engine-optimal-institutional-digital-asset-execution-system.jpg)

## How Could Risk Governance Have Been Better Structured?

The governance framework at institutions like [Credit Suisse](https://prime.greeks.live/question/how-does-the-isda-credit-support-annex-function-to-reduce-daily-credit-exposure/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite) proved to be strategically deficient. The existence of a risk committee is standard; its effectiveness is what matters. The Counterparty Oversight Committee (CPOC) at Credit Suisse identified the risks associated with Archegos but failed in its strategic execution by not assigning clear actions, deadlines, or accountability. This points to a culture where risk management is a reporting function rather than an empowered governing force.

> A focus on short-term revenue generation strategically overshadowed the clear warnings produced by the banks’ own risk identification systems.

A superior strategic framework for risk governance would possess the following characteristics:

- **Empowerment of the Second Line of Defense** ▴ Risk managers must be empowered to enforce limits and demand additional margin, even against the objections of the front-office relationship managers. Their compensation and performance should be tied to the long-term health of the risk portfolio, not short-term revenue targets. At Credit Suisse, risk managers intended to ask for more margin but were overruled by business-side managers.

- **Dynamic and Holistic Margin Models** ▴ The margining strategy itself was a failure. Static or slow-to-adapt margin requirements were insufficient for a portfolio as volatile and concentrated as Archegos’s. A strategic approach uses dynamic margining that accounts not just for market volatility (VaR), but also for portfolio concentration (liquidity risk) and the counterparty’s overall leverage (wrong-way risk).

- **Mandatory Escalation and C-Suite Visibility** ▴ Persistent limit breaches should trigger automatic escalation protocols that bring the issue to the attention of senior management. The fact that the CEO and CRO of Credit Suisse were reportedly unaware of the Archegos exposure until the final days before its collapse is a catastrophic failure of strategic governance.

![Sleek dark metallic platform, glossy spherical intelligence layer, precise perforations, above curved illuminated element. This symbolizes an institutional RFQ protocol for digital asset derivatives, enabling high-fidelity execution, advanced market microstructure, Prime RFQ powered price discovery, and deep liquidity pool access](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-protocol-high-fidelity-execution-1.jpg)

## Comparative Risk Postures of Prime Brokers

The divergent outcomes among the various prime brokers exposed to Archegos reveal the difference between a strategic and a passive risk posture. Some firms, like Goldman Sachs and Morgan Stanley, were able to exit their positions quickly and with minimal losses. This suggests their strategic framework for due diligence and risk monitoring was more effective. They likely had more robust systems for real-time risk visualization and a culture that enabled decisive action when red flags appeared.

The table below provides a simplified comparison of the strategic postures:

| Strategic Element | Effective Posture (e.g. Goldman Sachs, Morgan Stanley) | Failed Posture (e.g. Credit Suisse, Nomura) |
| --- | --- | --- |
| Risk Culture | Risk management is an empowered partner to the business. | Risk management is a subordinate function to revenue generation. |
| Decision Speed | Culture and systems enable rapid, decisive action to cut exposure. | “Cultural unwillingness to engage in challenging discussions” leads to inertia. |
| Margin Strategy | Dynamic margining reflects concentration and liquidity risk. | Static or inadequate margining fails to cover potential losses. |
| Governance | Clear escalation paths and accountability for risk failures. | Failure to assign ownership or deadlines for identified risks. |

Ultimately, the Archegos saga demonstrates that counterparty due diligence cannot be a static, check-the-box exercise. It must be a dynamic, strategic function that actively seeks to understand the counterparty’s holistic market presence and is empowered by a governance structure that prioritizes long-term stability over immediate profit.

![An abstract visual depicts a central intelligent execution hub, symbolizing the core of a Principal's operational framework. Two intersecting planes represent multi-leg spread strategies and cross-asset liquidity pools, enabling private quotation and aggregated inquiry for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-rfq-protocol-engine-for-institutional-digital-asset-derivatives.jpg)

![A sophisticated digital asset derivatives RFQ engine's core components are depicted, showcasing precise market microstructure for optimal price discovery. Its central hub facilitates algorithmic trading, ensuring high-fidelity execution across multi-leg spreads](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-optimizing-multi-leg-spreads-for-optimal-capital-efficiency.jpg)

## Execution

The execution of counterparty due diligence in the case of Archegos was a catastrophic failure at multiple levels of operational procedure. The breakdown occurred not because the necessary risk management tools were unavailable, but because they were ignored, overridden, or poorly implemented. A granular analysis of the execution failures provides a clear playbook for what not to do, and a framework for constructing a more resilient operational protocol for counterparty risk management.

![Intersecting teal and dark blue planes, with reflective metallic lines, depict structured pathways for institutional digital asset derivatives trading. This symbolizes high-fidelity execution, RFQ protocol orchestration, and multi-venue liquidity aggregation within a Prime RFQ, reflecting precise market microstructure and optimal price discovery](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-rfq-execution-liquidity-microstructure.jpg)

## The Operational Playbook for Failure

The sequence of events leading to the multi-billion dollar losses at several prime brokers followed a distinct operational pattern of failure. This pattern can be deconstructed into a series of procedural missteps:

- **Flawed Initial Onboarding** ▴ The due diligence process began with a critical error ▴ failing to properly weight the significance of founder Bill Hwang’s regulatory history. A 2012 settlement with the SEC for insider trading and a subsequent trading ban in Hong Kong were known facts. Operationally, this should have resulted in, at a minimum, a higher risk rating for Archegos, stricter concentration limits, and elevated margin requirements from day one. Instead, these red flags were dismissed.

- **Ignoring System-Generated Alerts** ▴ The risk management systems at firms like Credit Suisse were, in fact, functioning on a technical level. They correctly identified “large, persistent limit breaches” as Archegos’s portfolio grew in size and concentration. The operational failure was the human override. Business-line managers and even in-business risk personnel systematically ignored these alerts, creating a culture where red lights were treated as mere suggestions.

- **Failure to Enforce Margin Calls** ▴ As the value of Archegos’s concentrated positions began to decline, margin calls were made. However, the execution of these calls was flawed. Instead of demanding immediate and full satisfaction, some banks reportedly allowed Archegos time to meet the calls or negotiated the amounts, giving the fund more rope. A strict operational protocol requires that margin calls be met promptly and in full, with failure to do so triggering immediate de-risking procedures.

- **Lack of a Coordinated Deleveraging Strategy** ▴ When the collapse became imminent, the prime brokers did not act in a coordinated fashion. They engaged in a frantic and disorderly liquidation of the collateral, which in turn accelerated the price decline of the underlying stocks and magnified the losses for everyone involved. While a fully coordinated response may have raised anti-trust concerns, the complete lack of communication between the lenders during the final hours was a failure of execution.

![A sleek cream-colored device with a dark blue optical sensor embodies Price Discovery for Digital Asset Derivatives. It signifies High-Fidelity Execution via RFQ Protocols, driven by an Intelligence Layer optimizing Market Microstructure for Algorithmic Trading on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-high-fidelity-execution-engine-optimized-rfq-protocols-prime-os-intelligence-layer.jpg)

## Quantitative Modeling and Data Analysis

A primary execution failure was the inadequacy of the risk models used. Many firms relied heavily on Value-at-Risk (VaR) models that were ill-suited for Archegos’s specific risk profile. VaR models are often based on historical volatility and assume a degree of portfolio diversification and market liquidity that was absent in the Archegos portfolio. The fund’s positions were highly concentrated in a small number of illiquid stocks, a fact that standard VaR models would not adequately capture.

A more robust quantitative execution would have involved extensive stress testing and scenario analysis specifically designed to model the risk of a concentrated, leveraged portfolio. The table below illustrates the estimated losses incurred by the major prime brokers, a direct result of these execution failures.

| Prime Broker | Estimated Loss (USD) | Key Execution Failure |
| --- | --- | --- |
| Credit Suisse | $5.5 billion | Systematic ignorance of risk limits; failure of governance. |
| Nomura | $2.9 billion | Inadequate risk models and slow response to margin calls. |
| Morgan Stanley | $911 million | Acted more quickly than others but still incurred significant losses. |
| UBS | $774 million | Delayed exit strategy compared to the fastest actors. |
| Goldman Sachs | Minimal | Rapid and decisive liquidation of collateral. |
| Deutsche Bank | Minimal | Early exit and effective risk management. |

![A centralized RFQ engine drives multi-venue execution for digital asset derivatives. Radial segments delineate diverse liquidity pools and market microstructure, optimizing price discovery and capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/high-fidelity-rfq-execution-for-institutional-digital-asset-derivatives.jpg)

## Predictive Scenario Analysis a Hypothetical Case Study

Let us construct a hypothetical scenario to illustrate how a robust execution of due diligence could have averted the disaster. Imagine a fictional prime broker, “Titan Bank,” is considering taking on Archegos as a client in 2018. The head of counterparty risk, Dr. Anya Sharma, initiates a deep due diligence process.

First, the onboarding team flags Bill Hwang’s 2012 SEC settlement. Instead of dismissing it, Dr. Sharma’s protocol requires a “qualitative risk overlay.” Her team interviews former colleagues of Hwang and builds a psychological and strategic profile, concluding he has a high propensity for concentrated, leveraged bets. This results in an internal “Concentration Risk” score of 9 out of 10 for Archegos.

Next, Titan Bank’s quantitative team runs a stress test based on this profile. They model a portfolio concentrated in just five volatile tech stocks, with leverage at 5:1, financed via swaps. They simulate a “liquidity crisis” scenario where the price of the largest holding drops 30% and the bid-ask spread widens by 500%.

Their model, which goes beyond standard VaR, predicts that a standard margin of 15% would be wiped out instantly and that liquidating the collateral would cause a further 20% price drop, leading to catastrophic losses. The model calculates a required “Concentration and Liquidity Premium” margin of 40% for this specific client and strategy.

> The decisive failure was one of execution; the risk was identifiable and the tools to mitigate it existed but were not properly deployed.

When the business-side managers propose a standard 15% margin to win the Archegos account, Dr. Sharma’s team presents their findings. The Counterparty Oversight Committee, empowered by the bank’s charter, has the authority to veto the relationship or enforce the 40% margin requirement. The business managers argue that Archegos will simply go to another bank. Dr. Sharma’s response is that the bank’s role is to price risk correctly, not to win every client at any cost.

The committee sides with the risk assessment. Archegos rejects the 40% margin and takes its business elsewhere. Titan Bank forgoes a few million in annual fees. In March 2021, as other banks are writing down billions in losses, Titan Bank’s risk committee reviews the Archegos decision as a successful execution of their due diligence protocol.

This case study, while hypothetical, demonstrates that the Archegos collapse was a failure of execution. The data was available, the risks were foreseeable, and the tools for proper modeling existed. The breakdown was in the operational discipline to use them correctly and the governance structure to enforce the results.

![A geometric abstraction depicts a central multi-segmented disc intersected by angular teal and white structures, symbolizing a sophisticated Principal-driven RFQ protocol engine. This represents high-fidelity execution, optimizing price discovery across diverse liquidity pools for institutional digital asset derivatives like Bitcoin options, ensuring atomic settlement and mitigating counterparty risk](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-for-prime-os.jpg)

## References

- Paul, Weiss, Rifkind, Wharton & Garrison LLP. “Report to the Board of Directors of Credit Suisse Group AG on Archegos Capital Management.” 2021.

- Financial Stability Board. “FSB Lessons Learnt from the Archegos Incident.” October 2021.

- U.S. Securities and Exchange Commission. “Testimony on ‘Oversight of the U.S. Securities and Exchange Commission ▴ Wall Street’s Cop on the Beat’.” Gary Gensler, May 6, 2021.

- International Organization of Securities Commissions. “IOSCO reviews the use of Total Return Swaps by investment funds.” July 2022.

- Basel Committee on Banking Supervision. “Newsletter on the Archegos default incident.” May 2021.

- “The fall of Archegos ▴ a timeline of the hedge fund’s collapse.” Financial Times, April 2021.

- “U.S. of America v. Sung Kook (Bill) Hwang, and Patrick Halligan.” Indictment, S9 22 Cr. 240, U.S. District Court, Southern District of New York, 2022.

- Gromb, Denis, and David Vayanos. “Equilibrium and Welfare in Markets with Financially Constrained Arbitrageurs.” Journal of Financial Economics, vol. 66, no. 2-3, 2002, pp. 361-407.

![A complex, intersecting arrangement of sleek, multi-colored blades illustrates institutional-grade digital asset derivatives trading. This visual metaphor represents a sophisticated Prime RFQ facilitating RFQ protocols, aggregating dark liquidity, and enabling high-fidelity execution for multi-leg spreads, optimizing capital efficiency and mitigating counterparty risk](https://options.greeks.live/wp-content/uploads/2025/07/sophisticated-multi-asset-rfq-architecture-visualizing-institutional-digital-derivatives-execution-liquidity-aggregation-and-prime-os-orchestration-for-high-fidelity-performance.jpg)

## Reflection

![A sophisticated institutional digital asset derivatives platform unveils its core market microstructure. Intricate circuitry powers a central blue spherical RFQ protocol engine on a polished circular surface](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-prime-os-unveiling-rfq-protocol-engine-market-microstructure-for-optimal-price-discovery-and-high-fidelity-execution.jpg)

## What Is the True Cost of a Mispriced Relationship?

The Archegos event compels a re-evaluation of how financial institutions perceive and price counterparty relationships. The operational protocols and risk models are merely tools. The ultimate decision-making process rests on a cultural foundation.

When a firm’s culture values short-term revenue above all else, it will inevitably find itself mispricing risk, often with catastrophic consequences. The billions lost by Credit Suisse and others were the final, lagging invoice for a service that was underpriced for years.

Reflecting on this incident requires moving beyond a simple forensic analysis of broken rules and flawed models. It necessitates a deeper introspection into the incentive structures that drive behavior within large financial organizations. How does your own operational framework balance the competing pressures of revenue generation and risk management?

At what point does the pursuit of a single, lucrative client relationship begin to introduce systemic fragility into your own portfolio? The Archegos collapse serves as a stark reminder that the most significant risks are often not hidden in complex derivatives, but in plain sight, embedded in the cultural and strategic choices a firm makes every day.

![A circular mechanism with a glowing conduit and intricate internal components represents a Prime RFQ for institutional digital asset derivatives. This system facilitates high-fidelity execution via RFQ protocols, enabling price discovery and algorithmic trading within market microstructure, optimizing capital efficiency](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-protocol-core.jpg)

## Glossary

<a href="https://prime.greeks.live/area/archegos-capital-management/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Prime RFQ visualizes institutional digital asset derivatives RFQ protocol and high-fidelity execution. Glowing liquidity streams converge at intelligent routing nodes, aggregating market microstructure for atomic settlement, mitigating counterparty risk within dark liquidity](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-high-fidelity-digital-asset-derivatives-rfq-protocol.jpg)

## Archegos Capital Management

Meaning ▴ Archegos Capital Management, a family office that failed spectacularly, illustrates systemic vulnerabilities within highly leveraged financial ecosystems, a lesson pertinent to the maturing crypto market. </a><a href="https://prime.greeks.live/area/counterparty-risk/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A refined object, dark blue and beige, symbolizes an institutional-grade RFQ platform. Its metallic base with a central sensor embodies the Prime RFQ Intelligence Layer, enabling High-Fidelity Execution, Price Discovery, and efficient Liquidity Pool access for Digital Asset Derivatives within Market Microstructure](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-rfq-protocols-for-digital-asset-derivatives-execution.jpg)

## Counterparty Risk

Meaning ▴ Counterparty risk, within the domain of crypto investing and institutional options trading, represents the potential for financial loss arising from a counterparty's failure to fulfill its contractual obligations. </a><a href="https://prime.greeks.live/area/total-return-swaps/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Interconnected, sharp-edged geometric prisms on a dark surface reflect complex light. This embodies the intricate market microstructure of institutional digital asset derivatives, illustrating RFQ protocol aggregation for block trade execution, price discovery, and high-fidelity execution within a Principal's operational framework enabling optimal liquidity](https://options.greeks.live/wp-content/uploads/2025/07/precision-geometric-prisms-reflecting-institutional-digital-asset-derivatives-rfq-price-discovery-and-optimized-execution-market-microstructure.jpg)

## Total Return Swaps

Meaning ▴ Total Return Swaps (TRS) are derivative contracts where one party pays a fixed or floating rate in exchange for the total return of an underlying asset, including both income and capital gains or losses. </a><a href="https://prime.greeks.live/area/leverage/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A complex, reflective apparatus with concentric rings and metallic arms supporting two distinct spheres. This embodies RFQ protocols, market microstructure, and high-fidelity execution for institutional digital asset derivatives](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-engine-3.jpg)

## Leverage

Meaning ▴ In crypto investing, leverage refers to the practice of using borrowed capital to increase the potential return on an investment in digital assets. </a><a href="https://prime.greeks.live/area/due-diligence-process/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Two sharp, intersecting blades, one white, one blue, represent precise RFQ protocols and high-fidelity execution within complex market microstructure. Behind them, translucent wavy forms signify dynamic liquidity pools, multi-leg spreads, and volatility surfaces](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-optimized-liquidity-aggregation-principal-prime-os-intelligence-layer.jpg)

## Due Diligence Process

Meaning ▴ The Due Diligence Process constitutes a systematic and exhaustive investigation performed by an investor or entity to assess the merits, risks, and regulatory adherence of a prospective investment, counterparty, or operational engagement. </a><a href="https://prime.greeks.live/area/risk-management/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Stacked, glossy modular components depict an institutional-grade Digital Asset Derivatives platform. Layers signify RFQ protocol orchestration, high-fidelity execution, and liquidity aggregation](https://options.greeks.live/wp-content/uploads/2025/07/layered-digital-asset-derivatives-rfq-protocol-stack-for-prime-brokerage.jpg)

## Risk Management

Meaning ▴ Risk Management, within the cryptocurrency trading domain, encompasses the comprehensive process of identifying, assessing, monitoring, and mitigating the multifaceted financial, operational, and technological exposures inherent in digital asset markets. </a><a href="https://prime.greeks.live/area/due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Teal capsule represents a private quotation for multi-leg spreads within a Prime RFQ, enabling high-fidelity institutional digital asset derivatives execution. Dark spheres symbolize aggregated inquiry from liquidity pools](https://options.greeks.live/wp-content/uploads/2025/07/digital-asset-derivatives-rfq-prime-os-high-fidelity-execution.jpg)

## Due Diligence

Meaning ▴ Due Diligence, in the context of crypto investing and institutional trading, represents the comprehensive and systematic investigation undertaken to assess the risks, opportunities, and overall viability of a potential investment, counterparty, or platform within the digital asset space. </a><a href="https://prime.greeks.live/area/family-office/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Reflective and translucent discs overlap, symbolizing an RFQ protocol bridging market microstructure with institutional digital asset derivatives. This depicts seamless price discovery and high-fidelity execution, accessing latent liquidity for optimal atomic settlement within a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-execution-best-price-discovery.jpg)

## Family Office

Meaning ▴ A Family Office, within the context of crypto investing, is a private wealth management advisory firm that serves ultra-high-net-worth families, extending its services to include the acquisition, management, and strategic allocation of digital assets. </a><a href="https://prime.greeks.live/question/what-are-the-primary-differences-in-risk-management-protocols-between-prime-brokers/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A Prime RFQ interface for institutional digital asset derivatives displays a block trade module and RFQ protocol channels. Its low-latency infrastructure ensures high-fidelity execution within market microstructure, enabling price discovery and capital efficiency for Bitcoin options](https://options.greeks.live/wp-content/uploads/2025/08/prime-os-rfq-protocol-engine-high-fidelity-execution-digital-asset-derivatives.jpg)

## Prime Brokers

The primary differences in prime broker risk protocols lie in the sophistication of their margin models and collateral systems. </a><a href="https://prime.greeks.live/area/risk-models/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Precision metallic mechanism with a central translucent sphere, embodying institutional RFQ protocols for digital asset derivatives. This core represents high-fidelity execution within a Prime RFQ, optimizing price discovery and liquidity aggregation for block trades, ensuring capital efficiency and atomic settlement](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-prime-os-execution-hub.jpg)

## Risk Models

Meaning ▴ Risk Models in crypto investing are sophisticated quantitative frameworks and algorithmic constructs specifically designed to identify, precisely measure, and predict potential financial losses or adverse outcomes associated with holding or actively trading digital assets. </a><a href="https://prime.greeks.live/area/counterparty-due-diligence/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![A polished, dark teal institutional-grade mechanism reveals an internal beige interface, precisely deploying a metallic, arrow-etched component. This signifies high-fidelity execution within an RFQ protocol, enabling atomic settlement and optimized price discovery for institutional digital asset derivatives and multi-leg spreads, ensuring minimal slippage and robust capital efficiency](https://options.greeks.live/wp-content/uploads/2025/08/quantitative-finance-driven-rfq-workflow-for-best-execution-in-digital-assets.jpg)

## Counterparty Due Diligence

Meaning ▴ Counterparty Due Diligence is the systematic process of investigating and verifying the identity, financial standing, operational capabilities, and regulatory compliance of an entity before establishing a business relationship or engaging in a transaction. </a><a href="https://prime.greeks.live/area/bill-hwang/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![Central teal-lit mechanism with radiating pathways embodies a Prime RFQ for institutional digital asset derivatives. It signifies RFQ protocol processing, liquidity aggregation, and high-fidelity execution for multi-leg spread trades, enabling atomic settlement within market microstructure via quantitative analysis](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-core-for-institutional-digital-asset-rfq-protocol-execution-engine.jpg)

## Bill Hwang

Meaning ▴ Bill Hwang is a notable figure in finance, recognized as the founder of Archegos Capital Management, whose highly leveraged activities precipitated significant market disruption and substantial losses for several major financial institutions in March 2021. </a><a href="https://prime.greeks.live/question/how-does-the-isda-credit-support-annex-function-to-reduce-daily-credit-exposure/?utm_source=options.greeks.live&utm_medium=referral&utm_campaign=satellite" class="glossary-item-box">
![An abstract, reflective metallic form with intertwined elements on a gradient. This visualizes Market Microstructure of Institutional Digital Asset Derivatives, highlighting Liquidity Pool aggregation, High-Fidelity Execution, and precise Price Discovery via RFQ protocols for efficient Block Trade on a Prime RFQ](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-digital-asset-derivatives-rfq-market-microstructure-high-fidelity-execution.jpg)

## Credit Suisse

The ISDA CSA is a protocol that systematically neutralizes daily credit exposure via the margining of mark-to-market portfolio values. </a>

**Tags:** [Credit Suisse Archegos Report](https://options.greeks.live/area/credit-suisse-archegos-report/), [Due Diligence Process](https://options.greeks.live/area/due-diligence-process/), [Concentrated Portfolio Risk](https://options.greeks.live/area/concentrated-portfolio-risk/), [Margin Call](https://options.greeks.live/area/margin-call/), [Due Diligence](https://options.greeks.live/area/due-diligence/), [Prime Brokerage Risk](https://options.greeks.live/area/prime-brokerage-risk/)	

## Discover More

- 
### [How Do Regulatory Differences Impact the Choice between Traditional and Binary Options?](https://options.greeks.live/question/how-do-regulatory-differences-impact-the-choice-between-traditional-and-binary-options/)
![Precision-engineered metallic discs, interconnected by a central spindle, against a deep void, symbolize the core architecture of an Institutional Digital Asset Derivatives RFQ protocol. This setup facilitates private quotation, robust portfolio margin, and high-fidelity execution, optimizing market microstructure.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-core-infrastructure.jpg)

Regulatory frameworks define an option's operational reality, making the choice one between systemic integrity and isolated speculation.

- 
### [How Does the Proliferation of Non-Bank Liquidity Providers Change the Nature of Counterparty Risk Assessment?](https://options.greeks.live/question/how-does-the-proliferation-of-non-bank-liquidity-providers-change-the-nature-of-counterparty-risk-assessment/)
![A central, symmetrical, multi-faceted mechanism with four radiating arms, crafted from polished metallic and translucent blue-green components, represents an institutional-grade RFQ protocol engine. Its intricate design signifies multi-leg spread algorithmic execution for liquidity aggregation, ensuring atomic settlement within crypto derivatives OS market microstructure for prime brokerage clients.](https://options.greeks.live/wp-content/uploads/2025/07/precision-rfq-engine-for-crypto-derivatives-liquidity-aggregation.jpg)

The proliferation of NBLPs transforms counterparty risk from a static credit analysis into a dynamic, real-time surveillance of operational and systemic resilience.

- 
### [What Are the Best Practices for Curating an RFQ Panel to Minimize Counterparty Risk?](https://options.greeks.live/question/what-are-the-best-practices-for-curating-an-rfq-panel-to-minimize-counterparty-risk/)
![A macro view of a precision-engineered metallic component, representing the robust core of an Institutional Grade Prime RFQ. Its intricate Market Microstructure design facilitates Digital Asset Derivatives RFQ Protocols, enabling High-Fidelity Execution and Algorithmic Trading for Block Trades, ensuring Capital Efficiency and Best Execution.](https://options.greeks.live/wp-content/uploads/2025/07/precision-engineered-core-system-for-institutional-digital-asset-derivatives-rfq-protocol-execution-and-advanced-market-microstructure-optimization.jpg)

A resilient RFQ panel is an engineered system balancing competitive pricing with a multi-dimensional, data-driven counterparty risk protocol.

- 
### [How Does the Shift toward Central Clearing Affect Bilateral Counterparty Risk Management?](https://options.greeks.live/question/how-does-the-shift-toward-central-clearing-affect-bilateral-counterparty-risk-management/)
![A modular component, resembling an RFQ gateway, with multiple connection points, intersects a high-fidelity execution pathway. This pathway extends towards a deep, optimized liquidity pool, illustrating robust market microstructure for institutional digital asset derivatives trading and atomic settlement.](https://options.greeks.live/wp-content/uploads/2025/07/rfq-protocol-layer-connecting-institutional-digital-asset-liquidity-pools.jpg)

Central clearing re-architects risk by substituting diffuse bilateral exposures with concentrated, standardized obligations to a central node.

- 
### [How Does Central Clearing Change the Due Diligence Process for RFQ Counterparties?](https://options.greeks.live/question/how-does-central-clearing-change-the-due-diligence-process-for-rfq-counterparties/)
![A sleek, dark reflective sphere is precisely intersected by two flat, light-toned blades, creating an intricate cross-sectional design. This visually represents institutional digital asset derivatives' market microstructure, where RFQ protocols enable high-fidelity execution and price discovery within dark liquidity pools, ensuring capital efficiency and managing counterparty risk via advanced Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-protocol-execution-market-microstructure.jpg)

Central clearing reframes RFQ due diligence from bilateral credit analysis to a systemic interrogation of clearinghouse risk architecture.

- 
### [How Does a Regulator’s Stance on Binary Options Reflect Its Broader Financial Policy?](https://options.greeks.live/question/how-does-a-regulators-stance-on-binary-options-reflect-its-broader-financial-policy/)
![A metallic precision tool rests on a circuit board, its glowing traces depicting market microstructure and algorithmic trading. A reflective disc, symbolizing a liquidity pool, mirrors the tool, highlighting high-fidelity execution and price discovery for institutional digital asset derivatives via RFQ protocols and Principal's Prime RFQ.](https://options.greeks.live/wp-content/uploads/2025/08/institutional-digital-asset-derivatives-rfq-protocols-driving-high-fidelity-execution-and-market-microstructure-optimization-via-principal-prime-os.jpg)

A regulator's binary options stance is a diagnostic tool, revealing its core policy on risk, innovation, and investor protection.

- 
### [What Are the Primary Due Diligence Requirements for Onboarding a New Systematic Internaliser Counterparty?](https://options.greeks.live/question/what-are-the-primary-due-diligence-requirements-for-onboarding-a-new-systematic-internaliser-counterparty/)
![An intricate, transparent cylindrical system depicts a sophisticated RFQ protocol for digital asset derivatives. Internal glowing elements signify high-fidelity execution and algorithmic trading. A central angular structure represents atomic settlement and multi-leg spread capabilities, ensuring best execution within institutional trading.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-execution-protocol-architecture.jpg)

A firm's protocol for onboarding a Systematic Internaliser is the definitive measure of its operational and risk management architecture.

- 
### [What Are the Best Practices for Selecting Counterparties in an Algorithmic RFQ System?](https://options.greeks.live/question/what-are-the-best-practices-for-selecting-counterparties-in-an-algorithmic-rfq-system/)
![An advanced RFQ protocol engine core, showcasing robust Prime Brokerage infrastructure. Intricate polished components facilitate high-fidelity execution and price discovery for institutional grade digital asset derivatives. This system optimizes liquidity aggregation and supports multi-leg spread strategies for capital efficiency.](https://options.greeks.live/wp-content/uploads/2025/07/institutional-digital-asset-derivatives-rfq-engine-core-for-precision-trading.jpg)

A systematic, data-driven evaluation of counterparty performance, stability, and operational resilience is the core of effective RFQ execution.

- 
### [How Does a Prime Broker’s Stress Testing for a Concentrated Position Differ from Standard Portfolio Scenarios?](https://options.greeks.live/question/how-does-a-prime-brokers-stress-testing-for-a-concentrated-position-differ-from-standard-portfolio-scenarios/)
![Central teal-lit mechanism with radiating pathways embodies a Prime RFQ for institutional digital asset derivatives. It signifies RFQ protocol processing, liquidity aggregation, and high-fidelity execution for multi-leg spread trades, enabling atomic settlement within market microstructure via quantitative analysis.](https://options.greeks.live/wp-content/uploads/2025/07/prime-os-core-for-institutional-digital-asset-rfq-protocol-execution-engine.jpg)

A prime broker's stress test for a concentrated position is a deterministic analysis of a single point of failure, while a standard portfolio's is a probabilistic assessment of diversified risk.

---

## Raw Schema Data

```json
{
    "@context": "https://schema.org",
    "@type": "BreadcrumbList",
    "itemListElement": [
        {
            "@type": "ListItem",
            "position": 1,
            "name": "Home",
            "item": "https://options.greeks.live"
        },
        {
            "@type": "ListItem",
            "position": 2,
            "name": "Question",
            "item": "https://options.greeks.live/question/"
        },
        {
            "@type": "ListItem",
            "position": 3,
            "name": "What Specific Failures in Counterparty Due Diligence Contributed to the Archegos Losses?",
            "item": "https://options.greeks.live/question/what-specific-failures-in-counterparty-due-diligence-contributed-to-the-archegos-losses/"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Organization",
    "@id": "https://greeks.live/#organization",
    "name": "Greeks.Live",
    "url": "https://greeks.live/",
    "description": "Greeks.live is the definitive toolkit for the professional options trader, dedicated to empowering our users with institutional-grade data, advanced analytics, and a comprehensive suite of trading tools designed to provide a decisive edge in the market. Every article and guide published under the Greeks.live name is a product of our deep commitment to data-driven analysis and our mission to support the global trading community.",
    "email": "support@greeks.live",
    "logo": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/Greeks.Live-Logo-Icon.svg"
    },
    "hasPart": [
        {
            "@type": "WebSite",
            "name": "About Us",
            "url": "https://about.greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "App Download Page",
            "url": "https://about.greeks.live/#/download/basic_trade"
        },
        {
            "@type": "WebSite",
            "name": "Newcomers' Guide",
            "url": "https://twisty-sign-c8b.notion.site/Guide-for-Greeks-live-X-Deribit-Newbies-5a08a3052822427d800af6eaf3704c8d"
        },
        {
            "@type": "WebSite",
            "name": "Knowledge Base",
            "url": "https://linktr.ee/greeks.live"
        },
        {
            "@type": "WebSite",
            "name": "Option Terminology",
            "url": "https://greekslive.notion.site/88dfc00e7c584d4d8969b6302a79a12f?pvs=4"
        },
        {
            "@type": "WebSite",
            "name": "Terms of Service",
            "url": "https://greeks.live/#/tos"
        },
        {
            "@type": "WebSite",
            "name": "Disclaimer",
            "url": "https://greeks.live/#/disclaimer"
        }
    ],
    "sameAs": [
        "https://x.com/greekslive",
        "https://youtube.com/@greeks_live?si=-KjT0Lkw4WUCI0tD",
        "https://t.me/greekslive_notifications",
        "https://t.me/greekslive",
        "https://pinterest.com/greekslive/"
    ],
    "makesOffer": [
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "RFQ Platform",
                "url": "https://rfq.greeks.live",
                "description": "Execute institutional-grade block trades for crypto options and futures. This platform provides deep, over-the-counter (OTC) liquidity via a professional Request for Quote system.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Lending Tools",
                "url": "https://lend.greeks.live",
                "description": "Manage crypto lending and borrowing activities to earn yield or secure loans. This suite of tools helps users analyze interest rates and manage collateralized debt positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Data Lab",
                "url": "https://greeks.live/#/deribit/tools/datalab/BTC",
                "description": "Analyze historical and real-time options data with advanced metrics. This tool is designed for backtesting strategies and identifying market trends through comprehensive data visualization.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Profit & Loss Analysis (PnL)",
                "url": "https://greeks.live/#/deribit/tools/pnl_analysis",
                "description": "Track and analyze the Profit and Loss (PnL) of your options portfolio. This tool provides detailed performance metrics to help traders evaluate and refine their strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Position Visualization",
                "url": "https://greeks.live/#/deribit/tools/pv/BTC",
                "description": "Visualize complex options positions and their corresponding risk profiles. This tool generates payoff diagrams to help traders intuitively understand potential profit, loss, and exposure.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Options Calculator",
                "url": "https://greeks.live/#/deribit/tools/calculator",
                "description": "Calculate the theoretical price and risk parameters ('the Greeks') of crypto options. An essential tool for pricing new trades and analyzing the sensitivity of existing positions.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live Main Platform",
                "url": "https://greeks.live/",
                "description": "The central hub for the Greeks.live suite of professional cryptocurrency options and derivatives trading tools. Access analytics, manage positions, and explore the ecosystem.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Community Forum",
                "url": "https://t.greeks.live",
                "description": "Join the official Greeks.live community. Connect with other traders, share insights, and receive the latest updates directly from the team.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for Deribit",
                "url": "http://deribit.greeks.live",
                "description": "A dedicated interface for trading on the Deribit exchange. This platform leverages Greeks.live's advanced analytics and tools specifically for users of Deribit's options and futures markets.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "Greeks.live for OKX",
                "url": "http://okx.greeks.live",
                "description": "A dedicated interface for trading on the OKX exchange. This platform integrates Greeks.live's powerful analytics with the OKX marketplace, focusing on its options and derivatives products.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "GLVS.AI Trading Platform",
                "url": "https://www.glvs.ai/",
                "description": "An AI-powered platform for automated crypto options trading. Leverage advanced algorithms and data-driven signals to develop and deploy sophisticated, hands-free trading strategies.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        },
        {
            "@type": "Offer",
            "itemOffered": {
                "@type": "Service",
                "name": "API Testnet & Sandbox",
                "url": "https://test.greeks.live",
                "description": "A dedicated testnet environment for developers to test their API integrations and automated trading strategies. This sandbox allows for full functionality testing without risking real funds.",
                "provider": {
                    "@id": "https://greeks.live/#organization"
                }
            }
        }
    ],
    "subOrganization": [
        {
            "@type": "Organization",
            "name": "GreeksLive HK Co., Limited",
            "email": "support@greeks.live",
            "telephone": "+852-56418949",
            "address": {
                "@type": "PostalAddress",
                "streetAddress": "Unit 11, 27/F, K. Wah Centre, 191 Java Road",
                "addressLocality": "Hong Kong",
                "addressRegion": "North Point",
                "addressCountry": "CN",
                "postalCode": "0000"
            },
            "geo": {
                "@type": "GeoCoordinates",
                "latitude": "22.2932357",
                "longitude": "114.2022026"
            },
            "image": "https://options.greeks.live/wp-content/uploads/2025/08/Wah-Centre-Hong-Kong.jpg"
        }
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "Article",
    "mainEntityOfPage": {
        "@type": "WebPage",
        "@id": "https://options.greeks.live/question/what-specific-failures-in-counterparty-due-diligence-contributed-to-the-archegos-losses/"
    },
    "headline": "What Specific Failures in Counterparty Due Diligence Contributed to the Archegos Losses? \u25b4 Question",
    "description": "The Archegos losses stemmed from prime brokers failing to see a counterparty's systemic risk, focusing only on their siloed exposure. \u25b4 Question",
    "url": "https://options.greeks.live/question/what-specific-failures-in-counterparty-due-diligence-contributed-to-the-archegos-losses/",
    "datePublished": "2025-08-05T13:34:27+00:00",
    "dateModified": "2025-10-26T02:51:26+00:00",
    "articleSection": [
        "Question"
    ],
    "author": {
        "@id": "https://greeks.live/#organization"
    },
    "publisher": {
        "@id": "https://greeks.live/#organization"
    },
    "image": {
        "@type": "ImageObject",
        "url": "https://options.greeks.live/wp-content/uploads/2025/07/prime-os-institutional-digital-asset-derivatives-rfq-engine-core-market-microstructure-intelligence-layer.jpg",
        "caption": "Abstractly depicting an institutional-grade Crypto Derivatives OS core engine, where market microstructure facilitates high-fidelity execution. Precision instruments symbolize bilateral RFQ protocols driving price discovery and atomic settlement for multi-leg spread strategies in digital asset derivatives. This intelligence layer manages gamma exposure, achieving capital efficiency via Prime RFQ ensuring best execution and mitigating counterparty risk."
    },
    "keywords": [
        "Archegos Capital Management",
        "Bill Hwang",
        "Concentrated Portfolio Risk",
        "Counterparty Due Diligence",
        "Counterparty Risk",
        "Credit Suisse Archegos Report",
        "Due Diligence",
        "Due Diligence Process",
        "Family Office",
        "Family Office Exemption",
        "Financial Governance",
        "Financial Regulation",
        "Leverage",
        "Margin Call",
        "Prime Brokerage Risk",
        "Risk Management",
        "Risk Management Failure",
        "Risk Models",
        "Securities and Exchange Commission",
        "Systemic Risk",
        "Total Return",
        "Total Return Swaps"
    ]
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "WebSite",
    "url": "https://options.greeks.live/",
    "potentialAction": {
        "@type": "SearchAction",
        "target": "https://options.greeks.live/?s=search_term_string",
        "query-input": "required name=search_term_string"
    }
}
```

```json
{
    "@context": "https://schema.org",
    "@type": "FAQPage",
    "mainEntity": [
        {
            "@type": "Question",
            "name": "How Could Risk Governance Have Been Better Structured?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The governance framework at institutions like Credit Suisse proved to be strategically deficient. The existence of a risk committee is standard; its effectiveness is what matters. The Counterparty Oversight Committee (CPOC) at Credit Suisse identified the risks associated with Archegos but failed in its strategic execution by not assigning clear actions, deadlines, or accountability. This points to a culture where risk management is a reporting function rather than an empowered governing force."
            }
        },
        {
            "@type": "Question",
            "name": "What is the True Cost of a Mispriced Relationship?",
            "acceptedAnswer": {
                "@type": "Answer",
                "text": "The Archegos event compels a re-evaluation of how financial institutions perceive and price counterparty relationships. The operational protocols and risk models are merely tools. The ultimate decision-making process rests on a cultural foundation. When a firm's culture values short-term revenue above all else, it will inevitably find itself mispricing risk, often with catastrophic consequences. The billions lost by Credit Suisse and others were the final, lagging invoice for a service that was underpriced for years."
            }
        }
    ]
}
```


---

**Original URL:** https://options.greeks.live/question/what-specific-failures-in-counterparty-due-diligence-contributed-to-the-archegos-losses/
