Bitmex, Deribit Liquidate 3AC’s Positions — Negativity Continues to Plague the Crypto Hedge Fund – Bitcoin News


Two days ago, News reported on the cryptocurrency hedge fund Three Arrows Capital (3AC) after reports claimed that the company was allegedly struggling with financial difficulties and possible insolvency. Now the crypto company Finblox is feeling the effects of 3AC’s problems, and a number of digital currency companies have liquidated the leverage positions of the hedge fund.

Speculation About Financial Difficulties Linked To Three Arrows Capital Continue

There are many rumors and speculations around the crypto hedge fund Three Arrows Capital (3AC), and it seems to influence other crypto companies as well. Surely, 3AC’s problems began with its investment in the Terra blockchain, as it bought $ 559 million of a locked LUNA (now a lunar classic), which is now worth just under $ 700. The Twitter account called The Defi Edge@thedefiedge) explained in a Twitter thread that after the Terra lease, 3AC allegedly tried to recover funds using more leverage to recoup its Terra investment losses.

Although, markets shook even more after the Terra LUNA and UST implosion, causing a significant amount of liquidation across the entire crypto industry. Another account called Degentrading (@hodlkryptonite) said 3AC has borrowed from every major lender and the company is facing major liquidations this week. Besides, it was speculation that 3AC dumped a large amount of Lido’s wrapped ether product called stETH, which placed a load on the stETH peg. Then a company backed by 3AC called Finblox details that it had to pause rewards (up to 90% APY) for all its users, and the platform also raised withdrawal limits.

In addition, after The Defi Edge ended its Twitter thread, a company (Protocol X) in which 3AC invested and wished to remain anonymous, told The Challenge Edge that 3AC held the treasury of the project. “3AC invests in different business circles. The protocol usually raises money in USDC / USDT. Well, the treasury usually sits around doing nothing. So a common agreement 3AC has made with its protocols is to “manage” their treasury, ”The Challenge Edge. wrote. The Twitter account added:

The Treasury of 3AC. 3AC gave an 8% APR guarantee on the treasury. So protocols would park the funds collected by 3AC + additional parts of its treasury. The protocols felt safe because well … it’s 3AC. Protocol X mentioned that the ghost is real. They talked to two other protocols who also mentioned that they were also ghosted by them. 3AC now holds part of their treasury, and they have no idea what the state of their cash is.

Bitmex and Deribit liquidate 3AC positions, co-founder Kyle Davies says hedge fund ‘finds fair solution for all constituents’

Additionally, a report published by The Block notes that Bitmex liquidated 3AC’s positions but did not disclose how much it liquidated. “This was a guaranteed debt and did not involve any client funds,” a Bitmex spokesman told The Block. “We will not be like other brands and will not be poetic about our limited exposure and strong capital position – instead, we will prove it by providing our users with a reliable and liquid trading site every day, no matter the situation.” On Twitter, cryptocurrency exchange Deribit also revealed information about 3AC’s trading business.

“We can confirm that Three Arrows Capital has been a shareholder in our parent company since February 2020,” Deribit said Thursday. “Due to market developments, Deribit has a small number of accounts that have a net debt to us, which we consider to be as distressed as possible. Even if none of this debt is repaid to us, we will remain financially sound and operations will not be We can confirm that all customer funds are secure and the full insurance fund will remain intact as it is. Any potential losses will be covered by Deribit, “the exchange added.

The same report published by The Block notes that the author of the editorial contacted both FTX and Bitfinex also about 3AC trades. FTX told The Block author Yogita Khatri that they do not comment on their clients, and Bitfinex explained that it “closed its positions at a loss without having to be liquidated,” Khatri’s report details. According to Bitfinex’s statement, 3AC has removed all of its funds from the company’s exchange. Since the rumors and speculations began to revolve around 3AC’s business dealings, so far, the public has heard only once from the company’s co-founder Su Zhu on Twitter.

La crypto tweet does not really go into some detail, but says, “We are in the process of communicating with the parties concerned and fully engaged in working out this.” 3AC co-founder Kyle Davies has not encrypted since June 9th. Davies, however, spoke with the Wall Street Journal (WSJ) and said: “We have always been believers in crypto and we still are. We are committed to working out issues and finding a fair solution for all our items. ”The WSJ report noted that 3AC sought the help of“ legal and financial advisors ”to ease the company’s financial burdens.

Tags in this story

@hodlkryptonite, @thedefiedge, 3AC, 3AC hedge fund, BitFinex, BitMex, crypto hedge fund, data, Degentrading, deribit, Dune Analytics, Finblox, ftx, Insolvency, insolvent, Kyle Davies, Settlements, report, rumors, Z Spechu, LUNA and UST, The Block, The Challenge Edge, Three Arrows Capital, Treasuries, USCC, USDD, Yogita Khatri

What do you think about the alleged financial issues surrounding the 3AC cryptocurrency hedge fund over the last week? Let us know what you think about this topic in the comments section below.


Jamie Redman

Jamie Redman is the News Leader at News and a financial technical journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for News on the disruptive protocols appearing today.

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