cryptoknowmics.com
By lending money to Three Arrows Capital (3AC), the leveraged hedge fund currently the subject of a liquidation order in the British Virgin Islands, cryptocurrency exchange Blockchain.com stands to lose $270 million. In a letter to shareholders, Blockchain.com CEO Peter Smith stated, "Three Arrows is swiftly approaching insolvency, and the default impact is about $270 million worth of bitcoin and U.S. dollar loans from Blockchain.com." Due to falling cryptocurrency prices and inadequate risk management, Three Arrows Capital, which touted managing billions of dollars worth of assets earlier this year, crashed, exposing numerous crypto lending businesses.
Three Arrows Counterparty of Blockchain.com
In the four years that Three Arrows has been a counterparty of Blockchain.com, Smith said that the company has borrowed and repaid more than $700 million in cryptocurrencies. In the letter dated June 24, Smith also highlighted that Blockchain.com "remains liquid.'' The liquidation of Three Arrows, better known as 3AC, was reportedly demanded by creditors, including Blockchain.com and the derivatives exchange Deribit, about a week ago. Smith claimed 3AC "defrauded the crypto sector" and stated that this company wanted to "bring them accountable to the greatest extent of the law." One of the oldest firms in the cryptocurrency sector, Blockchain.com, was established in 2011. It created one of the first web wallets and blockchain explorers. The Luxembourg-based company became the first cryptocurrency-related sponsor of the American National Football League's Dallas Cowboys this year.