According to a report published on July 8, cryptocurrency firm Blockchain.com lost $270 million from exposure to 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 executive stressed that the firm “remains liquid, solvent and our customers will not be affected.”
Blockchain.com loses $270 million from 3AC exposure – CEO says company remains ‘liquid and solvent’
Another crypto company has disclosed losses resulting from exposure to Three Arrows Capital Limited (3AC), the beleaguered crypto hedge fund that recently filed Chapter 15 bankruptcy. The latest firm to bear the brunt of 3AC’s fallout is Blockchain.com, according to a report published by Coindesk, after Newsdesk reviewed a letter written by CEO Peter Smith.
Smith said the firm lost $270 million in the 3AC incident, but stressed that Blockchain.com is financially sound. “Three Arrows is rapidly going bankrupt and the default effect is approximately $270 million worth of cryptocurrency and US dollars in debt from Blockchain.com,” Smith elaborated in a letter to shareholders.
Coindesk’s Ian Allison explained that the letter states that over the course of four years, 3AC borrowed and returned $700 million from Blockchain.com. Furthermore, Allison spoke to a person familiar with the company’s financials, and the source also confirmed that Blockchain.com’s financials were sound.
“We do not understand that there is any kind of tension on the organisation,” the person was quoted as saying. The news comes after Blockchain.com secured up to $100 million in liquidity from TruFi’s single-borrower pool and the company’s sponsorship deal with the Dallas Cowboys. Blockchain.com also acquired Latin American crypto investment platform Sesocio in December 2021.
Blockchain.com CEO Peter Smith says 3AC ‘betrayed the crypto industry’
3AC was established by su zhu And Kyle Davis Davis was interviewed by The Wall Street Journal in 2012 and on June 17, 2022. Davis noted at the time that 3AC had bought $200 million in Luna Classic (LUNC) before the value of the crypto asset collapsed.
LUNC purchases now cost less than $1K, and some reports Say 3AC tried to recover the loss by using additional leverage or ‘revenge trading’ to cover the loss of the LUNC. According to a report published by Bloomberg, Peter Smith of Blockchain.com said that his company is working with investigators regarding 3AC’s issues.
Smith insists Blockchain.com plans to “catch up” [3AC] accountable to the fullest extent of the law” and said that the crypto hedge fund “betrayed the crypto industry.” The report further stated that both Deribit and Blockchain.com insisted on the liquidation of 3AC.
Blockchain.com has joined companies that saw losses due to 3AC exposure, including firms such as Voyager Digital, BlockFi, Babel Finance and Wald. Blockfi secured a credit line from FTX, while Babel, Vault, and Voyager halted all withdrawals and Voyager ended up filing for bankruptcy.
How do you think Blockchain.com lost $270 million from 3AC exposure? Let us know what you think about this topic in the comment section below.
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