8 Blocks Capital asks to freeze funds of Three Arrows due to the loss of $1 million

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Three Arrows Capital Cryptocurrency Fund (3AC) could be the subject of a new scandal amid growing speculation about its possible bankruptcy.

CEO of 8 BlocksCapital, 3AC's liquidity provider, Danny Yuan, said his team discovered $1 million was missing from the company's funds deposited with Three Arrows Capital.

Explaining the reason for the accusations, Danny Yuan said,that on June 12, 2022, when the cryptocurrency market fell, 8 Blocks Capital requested a withdrawal from the 3AC operations team. However, his company’s request was ignored and there was no response from the cryptocurrency fund.

When 8 Blocks Capital using a scriptaudited 3AC account balances and found a $1 million shortfall. Danny Yuan said he reached out to 3AC co-founder Kyle Davies and his team for clarification. However, as in the previous case, I did not receive an answer.

From third-party sources, representatives of 8 Blocks Capital learned that it was possible that the Three Arrows team, in order to avoid the liquidation of positions, replenished its brokerage account with client funds.

“We found out that they used everywherelong leverage and received margin calls. The platform had no choice but to liquidate its positions, causing markets to fall further. Losing bets is common, but you have to be honest and not drag others into your bets who have nothing to do with it,” Danny Yuan tweeted.

Director of 8 BlocksCapital has called on platforms where 3AC's assets may be listed to freeze them so that creditors have a chance to get their money back after a future trial.

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