According to a report released on July 8, cryptocurrency firm Blockchain.com lost $270 million from its exposure to crypto hedge fund Three Arrows Capital (3AC) lost $270 million. The news was shared in a recent letter to shareholders written by the company’s CEO, Peter Smith, in which Blockchain.com executives stressed that the company “remains liquid, solvent, and our customers are not affected.”
Blockchain.com lost $270 million from 3AC exposure – CEO says company “remains liquid and solvent”
Another crypto firm has revealed losses stemming from exposure toThree Arrows Capital Corporation (3AC), an embattled crypto hedge fund that just recently filed Chapter 15 bankruptcy.The latest company to feel the brunt of 3AC isBlockchain.com (Blockchain.com), according to a report published by Coindesk, after reviewing a letter to shareholders written by CEO Peter Smith.
Smith said he emphasized that Blockchain.com is financially sound despite the $270 million loss in the 3AC case.” Three Arrows is rapidly becoming insolvent, and the default affects approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com.” Smith detailed in his letter to shareholders.
Coindesk’s Ian Allison explained in the letter that he noted that over a four-year period, 3AC borrowed $700 million from Blockchain.com and returned it. In addition, Allison said that he spoke with someone familiar with the company’s finances, who also confirmed that Blockchain.com’s finances were sound.
“We don’t have a sense that there is any stress on the organization,” the person was quoted as saying. The news comes as Blockchain.com secured up to $100 million in liquidity from Truefi’s single-borrower pool and the company signed a sponsorship deal with the Dallas Cowboys.Blockchain.com also announced that in December 2021 acquired Sesocio, a Latin American crypto investment platform.
Blockchain.com CEO Peter Smith Says 3AC “Deceived the Crypto Industry”
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3AC was founded bySu Zhuandfounded by Kyle Daviesin 2012, and on June 17, 2022, Davies was interviewed by the Wall Street Journal Davies noted at the time that 3AC purchased $200 million in crypto assets before their value collapsed at Luna Classic (LUNC ) for $200 million before the value of the crypto assets collapsed
The LUNC purchase is now worth less than $1K, and somereportssay that 3AC used excessive leverage or “revenge trades” to try to recoup its LUNC losses. According to a report published by Bloomberg, Peter Smith of Blockchain.com stated that his company iscooperatingwith investigators regarding 3AC’s problems.
Smith stressed that Blockchain.com plans to “hold [3AC] accountable to the fullest extent of the law,” adding that crypto hedge funds have “defrauded the crypto industry.” The report further noted that both Deribit and Blockchain.com pushed for the liquidation of 3AC.
Blockchain.com joined a number of companies that suffered losses due to their 3AC exposure, including Voyager Digital, Blockfi, Babel Finance, and Vauld. Blockfi received credit from the FTX line, Babel, Vauld, and Voyager all suspended withdrawals, and Voyager was forced to file for bankruptcy.
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