A July 8 report claims that Blockchain.com suffered a loss of $270 million due to exposure to Three Arrows Capital (CBoS) crypto hedge fund (3AC). The news was shared in a recent letter to shareholders written by the company’s CEO Peter Smith. The Blockchain.com executive stressed that the firm “remains liquid, solvent and our customers will not be impacted.”
Blockchain.com Lost $270 Million From 3AC Exposure — CEO Says Company ‘Remains Liquid and Solvent’
A third crypto company reported losses due to exposure to Three Arrows Capital Ltd. (3AC), a troubled crypto hedge fund which just filed Chapter 15 bankruptcy. The latest firm to feel the brunt of 3AC’s fallout is Blockchain.com, according to a report published by Coindesk, after the newsdesk reviewed a letter to shareholders written by the CEO Peter Smith.
Smith claimed that Blockchain.com lost $270 million due to the 3AC accident, however, he stressed that Blockchain.com remains financially sound. “Three Arrows is rapidly becoming insolvent and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com,” Smith detailed in the letter to shareholders.
Coindesk’s Ian Allison explained that the letter notes that over the course of four years, 3AC borrowed and returned $700 million from Blockchain.com. Furthermore, Allison spoke with a person familiar with the company’s financials and the source also confirmed that Blockchain.com’s finances were sound.
“We are not getting the sense there is any kind of stress on the organization,” the individual is quoted as saying. The news follows Blockchain.com securing up to $100 million in liquidity from Truefi’s single-borrower pool, and the company’s sponsorship deal with the Dallas Cowboys. In December 2021, Blockchain.com acquired Sesocio, a Latin American cryptocurrency investment platform.
Blockchain.com CEO Peter Smith Says 3AC ‘Defrauded the Crypto Industry’
3AC was established by Su ZhuAnd Kyle DaviesIn 2012 and June 17, 2022 Davies was interviewed for the Wall Street Journal. Davies noted at the time that 3AC purchased $200 million in luna classic (LUNC) before the crypto asset’s value collapsed.
Today, the LUNC purchase has a value of less than $1K. reports say that 3AC tried to get the loss back by using excess leverage or ‘revenge trading’ to recoup the LUNC losses. According to a report published by Bloomberg, Blockchain.com’s Peter Smith said his company was working with investigators in regard to 3AC’s issues.
Smith stressed that Blockchain.com plans to “to hold [3AC] accountable to the fullest extent of the law” and added that the crypto hedge fund “defrauded the crypto industry.” The report further notes that both Deribit and Blockchain.com pushed for 3AC’s liquidation.
Blockchain.com joined a host of other companies who suffered losses from 3AC exposure, including Voyager Digital (Blockfi), Babel Finance (Babel Finance) and Vauld. Blockfi obtained a credit line through FTX. Voyager and Babel halted withdrawals, and Voyager filed for bankruptcy.
Do you agree with Blockchain.com’s loss of $270 million due to 3AC exposure Please comment below to let us know your thoughts on this topic.
Images CreditsShutterstock. Pixabay. Wiki Commons
DisclaimerThis information is provided for educational purposes only. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.
