u.today
As reported by Colin Wu's Twitter handle, Binance has refuted giving a big line of credit to embattled hedge fund Three Arrows Capital, saying several firms have approached the company for bailouts.
CZ：Binance is “not the primary trading venue” for Three Arrows, and abstained from extending the failed hedge fund a large credit line, many of these firms have approached Binance for rescue, he said without elaborating. SCMP reported. https://t.co/DbFX5LxlzX
— Wu Blockchain (@WuBlockchain) June 22, 2022
The most recent victim of the market collapse was Three Arrows Capital, a $10 billion cryptocurrency hedge fund based in Singapore. It was liquidated by many exchanges after failing to meet margin calls amid a collapse in the prices of digital currencies.
Shares of cryptocurrency exchange Voyager Digital also fell by 51% owing to a contagion from the troubled crypto hedge fund Three Arrows Capital. In a statement, Voyager said it may issue a notice of default to Three Arrows for failure to repay a loan. A total of 15,250 Bitcoin and $350 million in stablecoin USDC, worth nearly $660 million, are included in the broker's exposure to Three Arrows.
Voyager has since obtained credit lines from the investment division of Alameda Research for $200 million in cash, USDC stablecoin and 15,000 Bitcoin to address the liquidity needs of its customers.
Binance says it will not grant bailouts to failed projects
In an official Binance blog post entitled "note on bailouts and crypto leverage," Binance shares different bailout scenarios while emphasizing its duty to protect users, drawing from its position as one of the largest industry players with healthy cash reserves.
But here, Binance says it may not grant bailouts to failed projects, but it might consider projects that make small mistakes or those struggling to survive or find their feet.
In Binance's words: "Further, in any industry, there are always more failed projects than successful ones. Hopefully, the failures are small, and the successes are large. But you get the idea. Bailouts here don't make sense. Don’t perpetuate bad companies. Let them fail. Let other better projects take their place, and they will."