Dubai-based crypto fund Three Arrows Capital is facing possible insolvency after incurring at least $400 million in liquidations, The Block reported Wednesday.
Three Arrows, popularly known as 3AC, was liquidated by crypto lending firms and is currently in the process of repaying lenders and other counterparties, according to the report.
The firm’s founders, Su Zhu and Kyle Davies, were two of the most vocal participants in the crypto markets in the past few years, making bets on non-fungible tokens (NFT), decentralized finance (DeFi) applications, layer 1 blockchain tokens and cryptocurrency companies.
Zhu seemed to address rumors on Twitter this morning. “We are in the process of communicating with relevant parties and fully committed to working this out,” he said, without giving specifics.
3AC’s troubles come amid reports that crypto lender Celsius may be insolvent. The firm managed billions of dollars of user funds and may not possess enough capital to pay out investors.
One of these strategies Celsius used involved the usage of staked ether (stETH), a derivative tied to the ether that lost its peg and could have caused contagion risks, as reported.
3AC did not respond to requests for comment at writing time.
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