Blockchain.com CEO Reveals Company Lost $270 Million From 3AC Exposure

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Report Says Blockchain.com CEO Reveals Company Lost $270 Million From 3AC Exposure – The embattled cryptocurrency hedge fund Three Arrows Capital Ltd. (3AC), which recently filed for Chapter 15 bankruptcy, has been exposed to losses by another cryptocurrency company. After reviewing a letter to shareholders written by the CEO Peter Smith, Coindesk reported that Blockchain.com is the most recent firm to bear the brunt of 3AC’s fallout.

Smith stated that the company suffered a $270 million loss as a result of the 3AC incident but emphasized that Blockchain.com is financially stable. In the letter to shareholders, Smith explained that Three Arrows was “quickly approaching insolvency” and that “the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com.”

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According to Ian Allison of Coindesk, the letter indicates that 3AC borrowed $700 million from Blockchain.com over the course of four years and paid it back. Additionally, Allison communicated with a source who was acquainted with the business’s finances, and the source confirmed that Blockchain.com’s finances were sound.

The individual is cited as adding, “We are not getting the sense there is any kind of stress on the organization.” The news comes after Blockchain.com signed a sponsorship deal with the Dallas Cowboys and secured up to $100 million in liquidity through Truefi’s single-borrower pool. In December 2021, Blockchain.com also purchased the Sesocio crypto investment platform in Latin America.

Kyle Davies and Su Zhu founded 3AC in 2012, and on June 17, 2022, Davies spoke with the Wall Street Journal. At the time, Davies noted that 3AC had invested $200 million in luna classic (LUNC) prior to the crypto asset’s value collapse.

The LUNC purchase has since lost around $1K, and according to some sources, 3AC tried to make up the loss by engaging in “revenge trading” or using excessive leverage. Peter Smith, CEO of Blockchain.com, reportedly stated that his organization was working with investigators on 3AC’s issues in a Bloomberg report.

Smith emphasized that the cryptocurrency hedge fund “defrauded the crypto sector” and said that Blockchain.com intended to “bring 3AC accountable to the greatest extent of the law.” The report also mentions that Blockchain.com and Deribit both pushed for the liquidation of 3AC.

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Blockchain.com joins a long list of businesses that experienced losses as a result of 3AC exposure, including Blockfi, Voyager Digital, Babel Finance, and Vauld. While Babel, Vauld, and Voyager all stopped making withdrawals, and Voyager ultimately filed for bankruptcy, Blockfi was able to secure a credit line from FTX.

Originally posted 2022-07-08 22:19:25.

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