According to “well-placed sources,” speaking with The Block reporter Frank Chaparro, the digital currency hedge fund known as Three Arrows Capital (3AC) may be facing insolvency after significant liquidations. Sources say that the 3AC “liquidation totaled at least $400 million” and the hedge fund’s founder Su Zhu tweeted about “communicating with relevant parties” Tuesday evening (ET).
‘Well-Placed Sources’ Say Three Arrows Capital Was Liquidated for at Least $400 Million, Hedge Fund Allegedly Maintains ‘Limited Contact With Its Counter-Parties’
The crypto hedge fund Three Arrows Capital Ltd. founded by Su Zhu and Kyle Davies in 2012 could be on the brink of insolvency, according to a recent report. The Block’s Frank Chaparro reported that sources remarked 3AC may have been liquidated for roughly $400 million. The sources also noted that 3AC has “maintained limited contact with its counter-parties since being liquidated.” Dune Analytics data indicates that 3AC’s portfolio allocation is around $372.47 million and that has seen a 24-hour change of around $139.12 million.
While 3AC’s portfolio consists of tokens like AAVE, BAT, CEL, FTT, GUSD, LIDO, and LINK, currently $166 million is now in usd coin (USDC). The second-largest 3AC allocation is held in serum (SRM) as the hedge fund holds $46.3 million in SRM. 3AC was also invested in the Terra ecosystem of tokens and it allegedly lost significant capital from the LUNA and UST fallout. Meanwhile, as there has been no official word from 3AC about the possibility of the hedge fund going insolvent, 3AC co-founder Su Zhu made a vague statement about the situation.
“We are in the process of communicating with relevant parties and fully committed to working this out,” the 3AC co-founder said. Before that message, Su Zhu had not tweeted since June 7. Numerous crypto investors asked questions about the statement, but Su Zhu did not respond to any tweets. The other 3AC co-founder, Kyle Davies, stopped tweeting on June 9.
The 3AC liquidations and possible insolvency is not a good look for the crypto community at the moment. Especially because of the problems surrounding Celsius, Justin Sun’s and Tron’s wobbly USDD stablecoin, Microstrategy’s major losses, and the upcoming Federal Reserve meeting that may see one of the largest federal funds rate hikes in history. Amid all this doom and gloom, the global economy looks extremely dark and inflation is wreaking havoc on the world’s citizens, after a myriad of governments pumped trillions into the global economy over the last two years.
What do you think about the report that says Three Arrows Capital suffered from significant liquidations and may be insolvent? Let us know what you think about this subject in the comments section below.
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Author: Jamie Redman