CEO Peter Smith claimed the company remained in good health and that customers would not be impacted by the loss.
Key Takeaways
Blockchain.com has lost $270 million to Three Arrows Capital, according to a letter sent to shareholders two weeks ago.
Nevertheless the firm remains “liquid” and “solvent,” the CEO said before assuring customers would not be impacted by the loss.
Blockchain.com numbers among the entities wanting to hold Three Arrows Capital “fully accountable” for “defrauding” the crypto industry.
Three Arrows Capital owes $270 million to crypto lending platform Blockchain.com, though the CEO has insisted in a letter to shareholders that the company remains liquid and customers would not be impacted.
3AC “Defrauded the Crypto Industry”It appears Blockchain.com has also lost money to Three Arrows Capital.
The firm announced in a letter sent to its shareholders two weeks ago that Blockchain.com would suffer a $270 million loss should the notorious crypto hedge fund default on its obligations.
The company “remains liquid, solvent and our customers will not be impacted,” Blockchain.com CEO Peter Smith wrote in the letter. He further elaborated that Three Arrows Capital had transacted with the firm for over $700 million in crypto and U.S. dollars over the last four years.
Blockchain.com is a crypto trading platform that also provides lending and custody services for businesses and institutional clients. Three Arrows Capital is a prominent crypto hedge fund; its founders, Su Zhu and Kyle Davies, became famous in the crypto space for their prescient trading calls and for pushing the “supercycle” theory, arguing that Bitcoin would never face another 80% downturn.
The firm was wiped out following the brutal market meltdown, causing a liquidity crisis for their many “CeFi” counterparties, which are centralized companies that leverage for their customers the opportunities found in decentralized finance (DeFi) protocols. Celsius, BlockFi, and Voyager are among the firms having suffered heavy losses from Three Arrows Capital’s insolvency.
A court in the British Virgin Islands has ordered the liquidation of the crypto hedge fund, a move reportedly supported by Smith, who said Three Arrows Capital had “defrauded the crypto industry.” Smith stated that Blockchain.com intends to “hold them accountable to the fullest extent of the law.”
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
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