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HomeCryptoCrypto hedge fund Three Arrows Capital plunges into liquidation

Crypto hedge fund Three Arrows Capital plunges into liquidation

In the last few weeks, billions of dollars have been wiped out of the crypto market. Companies in the industry are in pain. Lending and trading companies are facing a liquidity crisis and many have announced layoffs.

Yoo Chun Christopher Wong | S3studio | Getty Images

Three Arrows Capital, a major crypto hedge fund, has fallen into liquidation, a person with knowledge of this issue told CNBC that it marked one of the biggest victims of the latest so-called “crypto winter”.

Teneo has participated in the past few days to deal with the liquidation process, said a person who requested anonymity because he did not have the authority to publicly discuss the issue.

Sky News first reported The story of liquidation.

Three Arrows Capital, also known as 3AC, did not respond to a request for comment when contacted by CNBC.

Teneo is in the very early stages of the liquidation process, he said. The restructuring company is taking steps to realize the assets held by 3AC and will open a website with instructions on how to contact creditors to make a claim within the next day or two. intend to do something.

3AC co-founded by Zhu Su and Kyle Davies One of the most prominent crypto hedge funds (Which It focuses on investing in digital assets such as the cryptocurrencies around it and is known for its high leverage bets. Zhu has a very bullish view of Bitcoin.

However, the slump in digital currency prices, which has wiped billions of dollars from the market in recent weeks, has hit 3AC and exposed the company’s liquidity crisis.

Monday, 3AC Loan defaults from Voyager Digital Consists of $ 350 million in stablecoins in US dollar pegs, USDCAnd 15,250 BitcoinIt’s worth about $ 304.5 million at today’s price.

3AC was exposed to the collapsed algorithm stablecoin terraUSD and sister token luna.

The Financial Times Earlier this month, US-based cryptocurrency lenders BlockFi and Genesis reported that they had liquidated some of their 3AC positions, citing people familiar with the matter. 3AC was borrowed from BlockFi, but couldn’t handle the margin call.

Margin calls are situations where investors have to invest more money to avoid losses in transactions made with borrowed cash.

The 3AC rewind has created a threat of transmission to some of the markets that may be exposed to the company.

Other crypto companies are also facing liquidity issues.Lending company Celsius and cryptocurrency exchange CoinFlex Forced to suspend customer withdrawals Both quote “extreme market conditions”.

However, CoinFlex had another problem with the customer. Couldn’t repay $ 47 million in debtCauses liquidity problems in the company.


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