According to reports, Blockchain.com is in danger of losing the US$270 million it lent to the newly bankrupt crypto hedge fund Three Arrows Capital (3AC).
In a letter to shareholders dated June 24 that was obtained by CoinDesk, Three Arrows’ CEO Peter Smith wrote: “Three Arrows is fast becoming insolvent and the default impact is roughly [US]$270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com.”
Should consumers be worried?
Around a week ago, creditors including Blockchain.com and the derivatives market Deribit reportedly asked that Three Arrows, also known as 3AC, be liquidated.
The recent crash in the cryptocurrency markets caused 3AC to suffer significant losses, and bankruptcy concerns were first raised in mid-June when the company spent at least $400 million on liquidations.
Deribit, a cryptocurrency derivatives exchange, was one of those to liquidate 3AC’s capital holdings after the hedge fund was unable to satisfy margin requirements.
Blockchain.com “remains liquid and solvent,” Smith continued, assuring consumers that the 3AC epidemic won’t affect them.
In a Bloomberg News piece, Smith said that 3AC “defrauded the crypto industry” and said that this company planned to “hold them responsible to the maximum extent of the law.”
According to a source with knowledge of Blockchain.com’s finances, the business is well-positioned to withstand losses.
According to the story, which cited a spokesman, Blockchain.com has also said that it is assisting with ongoing investigations into the hedge fund that “defrauded the crypto market.”
A British Virgin Islands court mandated the liquidation of 3AC earlier this week.
Teneo Restructuring, located in New York, was enlisted to manage insolvency and deal with creditors.
Source: https://www.thecoinrepublic.com/2022/07/11/blockchain-com-to-lose-us270-million-know-why/