Blockchain.com CEO Reveals Company Lost $270M From 3AC
Blockchain.com CEO Reveals Company Lost
The cryptocurrency company Blockchain.com lost $270 million as a result of exposure to the cryptocurrency hedge fund Three Arrows Capital, according to a report released on July 8. The company's CEO, Peter Smith, informed shareholders of the information in a recent letter. The Blockchain.com CEO said, the company "remains liquid, solvent, and our customers will not be harmed."
The troubled cryptocurrency hedge firm Three Arrows Capital Ltd. (3AC), which recently filed for Chapter 15 bankruptcy, has been linked to losses by another cryptocurrency startup. After reviewing a letter to shareholders sent by CEO Peter Smith, Coindesk reported that Blockchain.com is the most recent company to bear the brunt of 3AC's consequences.
Smith stated that the company suffered a $270 million loss as a result of the 3AC incident but emphasized that Blockchain.com remains financially stable. In the letter to shareholders, Smith said that Three Arrows was "quickly approaching insolvency" and that "the default impact is roughly $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com."
According to Ian Allison of Coindesk, the letter indicates that 3AC borrowed $700 million from Blockchain.com over the course of four years and paid it back. Additionally, Allison communicated with a source who was acquainted with the business's finances, and the source concurred that Blockchain.com's finances were solid.
The individual is noted as adding, "We don't get the impression that there is any type of stress on the organization." The revelation comes after Blockchain.com signed a sponsorship agreement with the Dallas Cowboys and secured up to $100 million in liquidity through Truefi's single-borrower pool. In December 2021, Blockchain.com also purchased the Sesocio cryptocurrency investing platform in Latin America.
Kyle Davies, who started 3AC with Su Zhu in 2012, spoke with a media outlet on June 17, 2022. When the value of the cryptocurrency asset fell, 3AC bought $200 million worth of luna classic (LUNC), according to Davies at the time.
According to some sources, 3AC attempted to recover the loss by utilizing excessive leverage or "revenge trading" to make up for the losses on the LUNC transaction, which is now only worth a little over $1,000. Peter Smith of Blockchain.com reportedly stated to sources that his company was collaborating with investigators on 3AC's problems.
Smith emphasized that the cryptocurrency hedge fund "defrauded the crypto sector" and said that Blockchain.com intended to "bring [3AC] responsible to the greatest extent of the law." The report also mentions that Blockchain.com and Deribit both advocated for the liquidation of 3AC.
Along with businesses like Voyager Digital, Blockfi, Babel Finance, and Vauld, Blockchain.com is the latest in a long list of businesses to suffer losses as a result of 3AC exposure. While Babel, Vauld, and Voyager all temporarily halted withdrawals, Voyager ultimately decided to file for bankruptcy, Blockfi managed to secure a credit line from FTX.
