Shadine Taufik · · 1 min readLuna backer Three Arrows Capital may face insolvency amid liquidations
Crypto hedge fund Three Arrows Capital could be in danger of insolvency after going through major liquidations, sources with knowledge of the matter told The Block.
The Singapore-based firm is looking at options to repay lenders and counterparties after allegedly undergoing over US$400 million in liquidation, according to the report. Having invested in play-to-earn game Axie Infinity and firms such as BlockFi and Deribit, Three Arrows Capital has an extensive portfolio. However, the sources did not name the companies responsible for the liquidation.
The crypto market has been beleaguered of late, further fueling the hedge fund’s plunge. The collapse of Terraform Labs’ Luna token last month also resulted in huge losses for Three Arrows Capital, which is a huge backer of the Seoul-based crypto firm.
Apart from the liquidation, Three Arrows Capital also encountered setbacks when projects it had invested in like Ethereum and Avalanche experienced downturns – 47% and 57%, respectively – roughly during the same period.
Three Arrows Capital was founded in 2012 by Kyle Davies and Su Zhu. Its blockchain investments alone were worth US$10 billion, analytics firm Nansen estimated.
Addressing the rumors, Zhu said in a Twitter post that the company is “in the process of communicating with relevant parties and fully committed to working this out.”
Editing by Miguel Cordon and Joy Tirkey
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