Binance shares various bailout scenarios while stressing its duty to protect users
as reported by Colin Wu’so The Twitter handle, Binance, has denied granting a large line of credit to crisis-ridden hedge fund Three Arrows Capital, saying that several firms have approached the company for bailouts.
CZ：Binance is “not the primary trading venue” for Three Arrows, and the failed hedge fund has been kept away from expanding a major credit line, with many of these firms approaching Binance to the rescue, asking for an extension. without saying SCMP informed. https://t.co/DbFX5LxlzX— Wu Blockchain (@WuBlockchain) 22 June 2022
The most recent victim of the market collapse was Three Arrows Capital, a $10 billion cryptocurrency hedge fund based in Singapore. It was liquidated by several exchanges after failing to meet margin calls amid a drop in the prices of digital currencies.
Shares of cryptocurrency exchange Voyager Digital also fell 51% due to a transition from troubled crypto hedge fund Three Arrows Capital. In a statement, Voyager said it may issue a default notice to Three Arrows for its failure to repay the loan. A total of 15,250 bitcoins and $350 million in stablecoin USDC, worth approximately $660 million, are included in the broker’s exposure to Three Arrows.
Voyager has since secured $200 million in cash, USDC stablecoin and a line of credit for 15,000 bitcoins from Alameda Research’s investment division to meet the liquidity needs of its clients.
Binance says it will not bail out failed projects
In an official Binance blog post titled “Note on Bailouts and Crypto Leverage”, Binance stressed its duty to protect users, while drawing from its position as one of the largest industry players with healthy cash reserves, various Shares bailout scenarios.
But here, Binance says it cannot bail out projects that have failed, but that it can consider projects that make small mistakes or that are struggling to survive or find their feet.
In the words of Binance: “Also, in any industry, there are always more unsuccessful projects than successful ones. Expect that the failures are small, and the successes are big. But you get the idea. There is no point in bailing out here. Don’t keep the bad companies. Let them fail. Let other better projects take their place, and they will.”