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Singapore-based cryptocurrency hedge fund Three Arrows Capital, or 3AC, caused a $270 million loss for crypto exchange blockchain.com.
“Three Arrows is rapidly becoming insolvent and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com,” said Peter Smith, Blockchain.com CEO.
Blockchain.com was founded in 2011. It has been one of the most successful and long-running startups in the industry. The company was one of 3AC’s creditors pushing for it to liquidate assets.
Three Arrows Capital saw success during recent bull runs, but when it acquired assets — including NFTs worth millions — it was ordered to liquidate.
On June 22, 3AC reportedly failed to repay $665 million worth of loans from crypto broker Voyager Digital Holdings, Inc. On July 5, Voyager declared bankruptcy.
The crypto market crash, current bear market, poor risk management, and undercollateralized loans played major roles in the company’s problems. Since 3AC’s June 27 bankruptcy filing, executives have sought protection from creditors using Chapter 15 of the US Bankruptcy Code.
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