Three Arrows may have been liquidated for nearly $400 million, as per sources
By Shashank Bhardwaj
Three Arrows Capital (3AC), a crypto hedge fund based in Singapore, is nearing insolvency after incurring at least $400 million in liquidations. The Dubai-based investment firm was dissolved by crypto lending firms and is currently repaying lenders and other counterparties. 3AC was founded by Su Zhu and Kyle Davies in 2012.
The news comes from well-placed sources in conversation with Frank Chaparro from 'The Block. It is still yet to be confirmed by an official source whether or not there is any truth to it.
3AC previously funded crypto projects such as Ethereum (ETH), Avalanche (AVAX), and Polkadot (DOT), all of which are falling mark-to-mark as the crypto market approaches its lowest point since the 2018 meltdown.
3AC, which managed a $10 billion peak once, suffered losses from its investment in Luna during the Terra-UST crisis.
3AC's problems coincide with concerns that crypto lender Celsius may be bankrupt. The company handled billions of dollars in user payments but might not have enough capital to pay back its investors. According to reports, one technique Celsius used was staked ether (stETH), a derivative pegged to the ether that lost its peg and could have produced contagion concerns.
Meanwhile, on-chain data indicates that 3AC is selling existing crypto assets to reduce collateral requirements for certain positions. According to blockchain statistics, one of 3AC's wallets owes $183 million. As of May 31, Wu Blockchain reported firm's loss of around $31.37 million via Bitfinex trading. Chris Burniske, a former head of Cathie Wood's crypto-investment firm Ark Invest also claims that 3AC will collapse shortly after Terra and Celsius.
Zhu appeared to answer speculations on Twitter in a brief statement, saying that "We are in the midst of speaking with appropriate parties and are totally committed to working this out." As of now, 3AC has not put out any other official statement surrounding the rumours of going insolvent yet.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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