According to “well-placed sources,” speaking with The Block reporter Frank Chaparro, the digital currency hedge fund known as Three Arrows Capital (3AC) may be facing insolvency after significant liquidations. Sources say that the 3AC “liquidation totaled at least $400 million” and the hedge fund’s founder Su Zhu tweeted about “communicating with relevant parties” Tuesday evening (ET).
‘Well-placed sources’ say Three Arrows’ capital liquidated for at least $400m, hedge fund allegedly maintains ‘limited contact with counterparties’
Crypto hedge fund Three Arrows Capital Ltd. founded by Su-Zhu and Kyle Davies in 2012 could be on the verge of insolvency, according to a recent report. The Block’s Frank Chaparro reported that sources have pointed out that 3AC may have been liquidated for around $400 million. The sources also noted that 3AC has “maintained limited contact with its counterparties since its liquidation.” Data from Dune Analytics indicates that 3AC’s portfolio allocation is approximately $372.47 million and has seen a 24-hour change of approximately $139.12 million.
While 3AC’s portfolio consists of tokens like AAVE, BAT, CEL, FTT, GUSD, LIDO, and LINK, currently $166 million is now in usd coin (USDC). The second-largest 3AC allocation is held in serum (SRM) as the hedge fund holds $46.3 million in SRM. 3AC was also invested in the Terra ecosystem of tokens and it allegedly lost significant capital from the LUNA and UST fallout. Meanwhile, as there has been no official word from 3AC about the possibility of the hedge fund going insolvent, 3AC co-founder Su Zhu made a vague statement about the situation.
“We are communicating with affected parties and are fully committed to resolving this issue,” the 3AC co-founder said. said. Prior to this post, Su Zhu had not tweeted since June 7. Many crypto investors asked about the statement, but Su Zhu did not respond to any tweets. 3AC’s other co-founder, Kyle Davies, quit tweeting on June 9.
The 3AC liquidations and possible insolvency is not a good look for the crypto community at the moment. Especially because of the problems surrounding Celsius, Justin Sun’s and Tron’s wobbly USDD stablecoin, Microstrategy’s major losses, and the upcoming Federal Reserve meeting that may see one of the largest federal funds rate hikes in history. Amid all this doom and gloom, the global economy looks extremely dark and inflation is wreaking havoc on the world’s citizens, after a myriad of governments pumped trillions into the global economy over the last two years.
