Business

Blockchain.com Loses $270M in 3AC Chaos

Key Takeaways

  • Blockchain.com has misplaced $270 million to Three Arrows Capital, in accordance with a letter despatched to shareholders two weeks in the past.
  • However the agency stays “liquid” and “solvent,” the CEO mentioned earlier than assuring prospects wouldn’t be impacted by the loss.
  • Blockchain.com numbers among the many entities wanting to carry Three Arrows Capital “absolutely accountable” for “defrauding” the crypto trade.

Three Arrows Capital owes $270 million to crypto lending platform Blockchain.com, although the CEO has insisted in a letter to shareholders that the corporate stays liquid and prospects wouldn’t be impacted.

3AC “Defrauded the Crypto Trade”

It seems Blockchain.com has additionally misplaced cash to Three Arrows Capital.

The agency introduced in a letter despatched to its shareholders two weeks in the past that Blockchain.com would undergo a $270 million loss ought to the infamous crypto hedge fund default on its obligations.

The corporate “stays liquid, solvent and our prospects is not going to be impacted,” Blockchain.com CEO Peter Smith wrote within the letter. He additional elaborated that Three Arrows Capital had transacted with the agency for over $700 million in crypto and U.S. {dollars} over the past 4 years.

Blockchain.com is a crypto buying and selling platform that additionally offers lending and custody providers for companies and institutional shoppers. Three Arrows Capital is a distinguished crypto hedge fund; its founders, Su Zhu and Kyle Davies, turned well-known within the crypto house for his or her prescient buying and selling calls and for pushing the “supercycle” idea, arguing that Bitcoin would by no means face one other 80% downturn. 

The agency was worn out following the brutal market meltdown, inflicting a liquidity disaster for his or her many “CeFi” counterparties, that are centralized firms that leverage for his or her prospects the alternatives present in decentralized finance (DeFi) protocols. Celsius, BlockFi, and Voyager are among the many companies having suffered heavy losses from Three Arrows Capital’s insolvency.

A courtroom within the British Virgin Islands has ordered the liquidation of the crypto hedge fund, a transfer reportedly supported by Smith, who mentioned Three Arrows Capital had “defrauded the crypto trade.” Smith acknowledged that Blockchain.com intends to “maintain them accountable to the fullest extent of the legislation.”

Disclosure: On the time of writing, the writer of this piece owned ETH and a number of other different cryptocurrencies.

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