Another cryptocurrency exchange reports huge losses thanks to Three Arrows Capital exposure

Cryptocurrency exchange Blockchain.com is facing a $270 million loss on loans to Three Arrows Capital (3AC), a Singapore-based crypto hedge fund that was recently subject to a winding-up order in the British Virgin Islands.

Blockchain.com Exchange Faces $270 Million Loss

Another crypto company has revealed losses stemming from having worked with the company Three Arrows Capital Ltd. (3AC) which recently he declared bankruptcy. The last company to feel the brunt of the 3AC impact is Blockchain.com 

The information in question was provided by Blockchain.com CEO Peter Smith himself in a letter to the company's shareholders:

"Three Arrows is rapidly becoming insolvent and the initial impact is around $270 million in cryptocurrency and US dollar loans from Blockchain.com," he wrote.

The exchange has partnered with Three Arrows for the past four years, during which the fund has borrowed and repaid over $700 million worth of cryptocurrencies. He then assured everyone that the exchange "remains liquid and solvent and its customers will not be affected."

Smith stressed that Blockchain.com plans to "hold [3AC] accountable to the full extent of the law," adding that the crypto hedge fund "defrauded the crypto industry." 

Case 3AC

Founded in 2012 by Su Zhu and Kyle Davies, Three Arrows Capital has grown into one of the largest cryptocurrency hedge funds in the world. However, the company has been heavily impacted by the recent cryptocurrency market crash.

In the month of May, the fund suffered significant losses during the collapse of the Terra ecosystem. The reason is that the fund invested heavily in the native token LUNA, which ended up at zero after the demise of the stablecoin Terra USD (UST). 3AC is estimated to have lost about $200 million after the project collapsed. In mid-June, 3AC suffered $400 million in liquidations

Blockchain.com, along with derivatives exchange Deribit, were among the companies pushing for the liquidation of 3AC. At the end of June, a court based in the British Virgin Islands ordered the liquidation of 3AC.

Blockchain.com joins a number of companies that have seen losses due to exposure to 3AC, including the likes of Voyager Digital, Blockfi, Babel Finance and Vauld. Blockfi secured a loan from FTX, while Babel, Vauld and Voyager all suspended withdrawals and Voyager eventually filed for bankruptcy.

Founded in 2011, Blockchain.com is one of the oldest companies in the cryptocurrency sector. The startup developed one of the first blockchain explorers and developed one of the first in-browser wallets.

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