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According to a report published on July 8, the cryptocurrency company Blockchain.com lost $ 270 million from exposure to the crypto hedge fund Three Arrows Capital (3AC). The news was shared in a recent letter to shareholders written by the company’s CEO Peter Smith. The Blockchain.com CEO stressed that the company “remains liquid, solvent and our customers will not be affected.”
Another crypto company has revealed losses arising from being exposed to Three Arrows Capital Ltd. (3AC), the controversial crypto hedge fund that has recently filed Chapter 15 bankruptcy. The latest company to feel the effects of 3AC’s downfall is Blockchain.com, according to a report published by Coindesk, after newsdesk reviewed a letter to shareholders written by CEO Peter Smith.
Smith said the company lost $ 270 million over the 3AC event, but stressed that Blockchain.com is financially sound. “Three Arrows is fast becoming insolvent and the default effect is around $ 270 million in cryptocurrency and US dollar loans from Blockchain.com,” Smith said in the letter to shareholders.
Coindesk’s Ian Allison explained that the letter notes that over four years, 3AC borrowed and returned $ 700 million from Blockchain.com. Furthermore, Allison spoke to a person familiar with the company’s finances and the source also confirmed that Blockchain.com’s finances were sound.
“We do not understand that there is any kind of stress on the organization,” the person said. The news follows Blockchain.com, which secures up to $ 100 million in liquidity from Truefi’s single lender pool, and the company’s sponsorship agreement with the Dallas Cowboys. Blockchain.com also acquired the Latin American crypto investment platform Sesocio in December 2021.
3AC was founded by Su Zhu and Kyle Davies in 2012 and June 17, 2022, Davies was interviewed by the Wall Street Journal. Davies noted at the time that 3AC bought $ 200 million in luna classic (LUNC) before the value of the crypto asset collapsed.
The LUNC purchase is now worth less than $ 1K, and something reports say that 3AC tried to recover the loss by using excess influence or “revenge trading” to recover the LUNC losses. According to a report published by Bloomberg, Blockchain.com’s Peter Smith said that his company worked with investigators in relation to 3AC’s problems.
Smith stressed that Blockchain.com plans to “hold [3AC] responsible to the full extent of the law “and added that the crypto hedge fund” scammed the crypto industry. “The report further notes that both Deribit and Blockchain.com pushed for 3AC’s liquidation.
Blockchain.com joins a number of companies that saw losses due to 3AC exposure, including companies such as Voyager Digital, Blockfi, Babel Finance and Vauld. Blockfi secured a credit limit from FTX while Babel, Vauld and Voyager all stopped withdrawals and Voyager ended up filing for bankruptcy.
What do you think about Blockchain.com losing $ 270 million from 3AC exposure? Tell us what you think about this topic in the comments section below.
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