Three Arrows fund reportedly facing insolvency
Three Arrows may have been liquidated for nearly $400 million, as per sources
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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.
