According to a new report, crypto lender BlockFi was among several companies liquidating at least part of 3AC’s positions.
Venture capital firm Three Arrows Capital (3AC) has reportedly failed to meet its creditors’ margin calls, increasing the risk of bankruptcy after this week’s cryptocurrency market crash triggered the Singapore-based firm’s unexpected liquidation.
Crypto lender BlockFi was among the firms liquidating at least some of 3AC’s positions, according to the Financial Times. Citing people familiar with the matter, the FT reported that 3AC borrowed Bitcoin (BTC) from a lender but was unable to meet a margin call after the market turned sour earlier this week.
The issues surrounding 3AC appear to have affected Finblox, a Hong Kong-based platform that allows investors to earn income from their digital assets. Finblox said it was forced to slash its withdrawal limits on Thursday due to concerns about the venture capital firm.
While estimates vary, 3AC likely spent $400 million liquidating multiple positions. The company had significant influence on Terra (originally Luna, now LUNC) and also held large positions in projects such as Solana (SOL) and Avalanche (AVAX). As Cointelegraph reported, 3AC has spent the past few days moving assets to replenish funds across various decentralized finance (DeFi) platforms, most notably Aave (AAVE).
However, this week’s massive liquidations were likely due to the crash of Ethereum (ETH), which fell to $1,000 on its way to its lowest since December 2020. It has also been suggested that 3AC’s exposure to synthetic assets such as Grayscale Bitcoin Trust (GBTC) and Lido’s Staked ETH (stETH) were also responsible for the mass liquidations.
Rumors of 3AC’s bankruptcy have surfaced in recent days after Su Zhu, the company’s outspoken co-founder, posted a cryptic tweet that the company was working with “relevant parties” to resolve its issues.