<\/p>\n
Venture firm Three Arrows Capital (3AC) has reportedly failed to meet margin calls from its lenders, raising the spectre of insolvency after this week\u2019s crypto market collapse triggered unforeseen liquidations for the Singapore-based company.<\/p>\n
Crypto lender BlockFi was among the firms to liquidate at least some of 3AC\u2019s positions, according to the Financial Times. Citing people familiar with the matter, FT reported that 3AC had borrowed Bitcoin (BTC) from the lender but was unable to meet a margin call after the market turned sour earlier this week. <\/p>\n
The issues surrounding 3AC appear to have impacted Finblox, a Hong Kong-based platform that allows investors to earn yield on their digital assets. Finblox said it was forced to reduce its withdrawal limits on Thursday due to concerns surrounding the venture firm.<\/p>\n
While estimates vary, 3AC likely incurred $400 million in liquidations across multiple positions. The company had significant exposure to Terra ( originally Luna, now LUNC) and also held large positions in projects such as Solana (SOL) and Avalanche (AVAX). As Cointelegraph reported, 3AC has spent the past few days moving assets to top up funds on various decentralized finance (DeFi) platforms, most notably Aave (AAVE). <\/p>\n
\nThree Arrows Capital bought 10.9M locked LUNA for $559.6m – it’s now worth $670.45.<\/p>\n
Ouch<\/p>\n
\u2014 Crypto Maxi (@cryptoMaxi420) June 14, 2022<\/a><\/p><\/blockquote>\n
However, this week\u2019s mass liquidations were likely triggered by the collapse of Ether (ETH), which plunged toward $1,000 en route to its lowest level since December 2020. It has also been speculated that 3AC\u2019s exposure to synthetic assets, such as the Grayscale Bitcoin Trust (GBTC) and Lido\u2019s Staked ETH (stETH), was also responsible for the mass liquidation events. <\/p>\n
Rumors about 3AC\u2019s insolvency have swirled in recent days after Su Zhu, the company\u2019s outspoken co-founder, issued a cryptic tweet that the company was working with \u201crelevant parties\u201d to resolve its issues.\u00a0<\/p>\n
\nWe are in the process of communicating with relevant parties and fully committed to working this out<\/p>\n
\u2014 Zhu Su (@zhusu) June 15, 2022<\/a><\/p><\/blockquote>\n<\/div>\n