Three Arrows Capital (3AC) is exploring the possibility of selling assets and "bailouts" from other companies, andis also trying to negotiate with creditors on deferred payments.The Wall Street Journal, citing hedge fund co-founder Kyle Davis.
Against the background of the collapse of the cryptocurrency market in the networkthere was information about the insolvency of 3AC. The company actively used high-risk DeFi tools and made a number of unsuccessful investments, including the LUNA cryptocurrency, which depreciated.
Terra's Death Spiral: How and Why LUNA and UST Failed
Davis explained to the WSJ that 3AC has hired legal and financial advisors to work out a solution for its investors and creditors. According to him, the structure has not stopped operating activities.
“We have always believed in cryptocurrencies and still do. We intend to look into the situation and find a fair solution for all our clients,” he said.
The co-founder of the hedge fund revealed that as part of the February token sale, the structure invested about $200 million in LUNA. After the collapse of the Terra ecosystem, this amount was practically written off.
“The Terra/LUNA situation took us by surprise,” he added.
Davis emphasized that 3AC was able to withstand the collapse of LUNA, but the subsequent cascade of adverse events that caused the collapse of the cryptocurrency market made the situation worse.
According to him, Three Arrows Capital is still trying to calculate its losses and evaluate the value of illiquid assets, which include venture capital investments in private companies and start-ups.
Managing partner of the law firm SolitaireLLP (advising 3AC) Nicol Yeo told the WSJ that the investors in the hedge fund are institutions and high net worth individuals. He added that Three Arrows Capital will keep the Monetary Authority of Singapore informed of developments.
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Earlier, the media reported on the liquidation of 3AC positions by its counterparties. BitMEX, FTX and Deribit platforms, as well as cryptocurrency lender BlockFi, took this step.
Recall that on June 16, the trading company 8 Blocks Capital accused Three Arrows Capital of using client funds to cover margin calls.
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