Three Arrows Capital, which boasted billions of dollars in assets under management earlier this year, has imploded thanks to a combination of plummeting crypto prices and poor risk management, with many crypto lending businesses becoming exposed.
Smith pointed out that Three Arrows has borrowed and repaid over $700 million worth of cryptocurrency in the four years that the firm has been a counterparty of Blockchain.com. Smith also emphasized that Blockchain.com “remains liquid, solvent and our customers will not be impacted,” in the letter dated June 24.
About a week ago, Blockchain.com and derivatives exchange Deribit were reported to be among the creditors that pushed for the liquidation of Three Arrows, also known as 3AC. In a Bloomberg News report, Smith said 3AC had “defrauded the crypto industry,” adding that this company intended “to hold them accountable to the fullest extent of the law.”
A person familiar with Blockchain.com’s finances told CoinDesk the company was in good shape to weather the losses.
“We are not getting the sense there is any kind of stress on the organization,” the person said.
Founded in 2011, Blockchain.com is one of the longest-running startups in the cryptocurrency industry and developed one of the earliest blockchain explorers and one of the earliest web browser wallets. This year, the Luxembourg-based firm became the first crypto-related sponsor of the Dallas Cowboys of the National Football League in the U.S.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.