Three Arrows Capital

Three Arrows Capitals, the Next Victim of Market Crash As Insolvency Rumors Fly

  • Crypto hedge fund Three Arrows Capital is bleeding funds as the market crash has hit it hard.
  • The firm has sold a lot of its holdings, including stETH.
  • Co-founder and CEO Zhu Su posted a crypto tweet, saying that the company “was communicating with relevant parties.”

The market crash seems to be claiming another victim — this time crypto hedge fund Three Arrows Capital. Multiple reports have emerged that hint at possible insolvency of the renowned hedge fund, which like others has suffered greatly over the past week.

Sources have said that the firm is struggling to pay back its lenders, who have begun liquidating their holdings. The amount liquidated is reported to be $400 million, and the names of the lenders have not been revealed.

Co-founder and CEO of Three Arrows Capital Zhu Su posted a tweet on June 15 saying “we are in the process of communicating with relevant parties and fully committed to working this out.” The tweet did not explicitly refer to any brewing troubles.

Three Arrows Capital has invested in projects like Ether, Polkadot, and Avalanche — all of which have tanked over the past few weeks. However, the biggest contributor to its precarious state is the firm’s investment in the Terra ecosystem, which is now well and truly a watershed event in the market’s history.

There has been no official statement on how the company is faring. If the problem is significant, they will have no choice but to inform the public, which should then offer some insight into the extent of the issue. Meanwhile, other crypto companies are also in the midst of crises.

3AC Follows Celsius in Experiencing Difficulty With Liquid Funds

The market crash has put unprecedented stress on several major crypto firms. One of the most notable of these is Celsius Network, which is facing financial issues as well. Nexo has put forward an offer to buy certain assets from Celsius, though this has not been agreed upon yet.

Celsius sold a large portion of its stETH holdings, but analysts note that 3AC is doing the same, if not more. Yesterday, the firm sold 30,000 stETH and reduced its AAVE positions, and more accounts are selling the tokens. It’s likely that it’s going towards paying back their debts.

Celsius is now looking at financial restructuring, after suspending all withdrawals. The company has hired lawyers to help with the situation, and of course, the CEL token has dropped considerably following the news.