- KuCoin is rumored to be going through insolvency points within the fallout from Three Arrows Capital’s collapse.
- The agency’s CEO has denied the claims, saying that “every thing on KuCoin is working properly.”
- The event follows a wave of crypto companies halting buyer withdrawals in response to excessive market situations and the Three Arrows disaster.
The rumors surfaced hours after Voyager Digital introduced it was freezing buyer withdrawals amid the continuing Three Arrows Capital disaster.
KuCoin Working as Regular, CEO Insists
Rumors that KuCoin might be on the point of collapse are unfaithful, in keeping with the agency’s CEO.
Pay attention to FUDs!
Undecided who’s spreading these sheer rumors, and what their intentions are, however #KuCoin doesn’t have any publicity to LUNA, 3AC, Babel, and so on.
No “immense undergo” from any “coin collapse”, no plan to halt withdrawal, every thing on KuCoin is working properly.
— Johnny_KuCoin (@lyu_johnny) July 2, 2022
Johnny Lyu addressed hypothesis that the agency might be going through insolvency in an early Saturday tweet storm, affirming that “every thing on KuCoin is working properly” and the change had no plans to halt withdrawals. Lyu additionally described the circulating chatter about KuCoin’s potential liquidity points as “sheer rumors” and confirmed that the agency has no publicity to the Terra ecosystem, Three Arrows Capital, or Babel Finance.
Rumors of KuCoin’s inner issues surfaced late Friday, hours after Voyager Digital turned the domino to fall as a part of crypto’s ongoing Three Arrows saga. Voyager introduced Friday that it was halting buyer withdrawals, deposits, and buying and selling and “exploring strategic alternate options” for the way the corporate might transfer ahead. Final month, it was revealed that Three Arrows had defaulted on a mortgage of 15,250 Bitcoin and 350 million USDC value round $665 million from Voyager. Three Arrows is but to make the repayments.
KuCoin raised $150 million in a funding spherical in Could, valuing the agency at $10 billion. As Lyu famous in his Saturday announcement, the agency can also be actively hiring regardless of the continuing market stoop. Lyu added that “being clear is at all times one in every of [KuCoin’s] key ideas” and closed his put up with a constructive observe: “Don’t FUD, BUIDL.”
The Three Arrows Disaster
Till the disaster started to unfold in early June, Three Arrows was one in every of crypto’s largest hedge funds holding greater than $10 billion in property below administration at its peak. Because the crypto market plummeted, it got here to mild that the agency was going through main liquidity points because it had taken on leverage from crypto lenders with out factoring for a big downturn. The agency’s co-founder Kyle Davies mentioned that it had misplaced $200 million on its Terra guess when LUNA crashed in Could, and a number of crypto lenders have since revealed that they’d publicity to the agency. BlockFi loaned Three Arrows an undisclosed sum and has since inked a deal to be acquired by FTX.US for as much as $240 million with a further $400 million rolling credit score facility. Babel Finance, CoinFLEX, and Celsius additionally responded to the market downturn by halting withdrawals, although none of them confirmed that they’d Three Arrows publicity. On Friday, the troubled hedge fund filed for Chapter 15 chapter in New York.
Although the complete scale of the Three Arrows disaster stays unknown, a number of companies have been onerous hit to date, and the market hasn’t proven a lot signal of life within the fallout. Bitcoin tumbled once more Saturday after every week of rocky value motion. It’s at present buying and selling at $19,260, about 72.1% down from its $69,000 peak.
Disclosure: On the time of writing, the creator of this piece owned ETH and several other different cryptocurrencies.