Three Arrows Capital was ordered by the court to liquidate assets, many organizations suffered related losses

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2022-07-01 23:55:40

A court in the UK Virgin Islands has ordered the liquidation of the entire assets of the crypto investment fund Three Arrows Capital (3AC).

Three Arrows Capital is in a serious crisis and entails many other consequences

Court orders the liquidation of Three Arrows Capital’s assets

British newspaper Sky News quoted an inside source on the evening of June 29 as saying that a court in the British Virgin Islands had ordered Teneo Restructuring, a corporate asset restructuring unit, to handle the case. Three Arrows Capital inability to pay debts.

Rumors of 3AC’s demise began circulating in early June. The Wall Street Journal reported that the hedge fund was struggling and had to seek a bailout deal after liquidating its assets.

This event could be a major shock to the crypto market, which has been struggling to recover from a long string of bad volatility.

Organizations involved

Voyager Digital has revealed Three Arrows Capital owes them 15,250 BTC and 350 million USDC, worth over $672 million. However, the company did not receive any response to the payment request when the debt payment due date was June 27. As a result, Voyager has declared that 3AC is insolvent and will take the necessary legal action to recover the assets.

Three Arrows Capital is a well-known crypto fund that suffered heavy losses after the collapse of LUNA-UST in May, followed by a massive liquidation of assets as the market continued to correct in June. The fund was found to have borrowed unsecured assets from a series of other entities, creating a widespread domino effect. Cryptocurrencies believed to be linked to the fund include:

– Celsius lending platform: affected by stETH devaluation, has blocked withdrawals;

– Finblox investment platform: influenced by 3AC, imposing withdrawal limit;

– Babel Finance lending platform: affected by 3AC, blocking withdrawals;

– DeFiance Capital investment fund: rumored to be influenced by 3AC;

– BlockFi lending platform: liquidated 3AC’s collateral, claimed to be unaffected but borrowed 250 million USDC from FTX;

– Voyager Digital investment app: influenced by 3AC, claims 3AC owes itself more than $662 million and has to borrow $485 million from Alameda to ensure liquidity, has imposed withdrawal limits for users.

– Kyber Network blockchain platform: affected by 3AC, claims the amount of damage is not large.

– Hoo Exchange: block withdrawals.

– AEX exchange: impose withdrawal limit.

The two founders of the fund, Kyle Davies and Su Zhu, have only released a single official statement since the beginning of June, confirming the company is facing liquidity difficulties and will try to find the best way to handle it. including considering selling off assets. This statement was made on June 17, and since then 3AC has not provided any further updates.

Recently, Genesis Trading continues to announce that it is facing a loss of up to hundreds of millions of dollars due to the cause of Three Arrows Capital.

According to an insider source revealed on June 29, the losses at Genesis Trading were mostly related to the investment fund Three Arrows Capital and the Hong Kong-based crypto lender Babel Finance. Damage is said to be in the hundreds of millions of dollars.

The above fall comes as the collapse of the Three Arrows Capital (3AC) fund sent shockwaves through the crypto lending industry, with many companies facing significant losses due to their exposure to the fund. . Meanwhile, Babel Finance still has not been able to come up with a satisfactory solution, many top leaders have left the company despite user money still stuck on the platform.

Besides, the source also said that Genesis Trading is looking to repay at least part of the money to its partners and some of the losses may have been covered by hedging. Amid such uncertainty, Genesis has even drawn lines of credit from its various relationships.

Genesis Trading CEO Michael Moro said:

“As we stated on June 17, the company has taken a mitigation measure against a major partner who failed to respond to our margin call. We sold our collateral, hedging, and went into business as usual. Currently Genesis Trading is trying to meet all the needs of customers.”

In fact, Genesis Trading has more than 44.3 billion USD in loans in the first quarter of 2022. Despite the difficulties at the moment, there has been a lot of speculation that Genesis Trading’s parent company is Digital. Currency Group – the crypto group that owns the largest global crypto investment fund Grayscale can spend about 1 billion USD to help Genesis Trading overcome “this shock”.

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