Arthur Cheong, founder of DeFi and Web3 gaming-focused venture capital firm DeFiance Capital, said his firm«not finished» after a week of stress in the crypto market.
«We are not finished, and in fact we are actively working to resolve the situation. The behavior of me and the team is consistent, and this will not change,” he wrote.
June 13 cryptolending platform Celsiussuspended withdrawals, exchanges and transfers between accounts “due to extreme market conditions.” However, analysts suggested that the real reason for what happened is a “liquidity crisis,” due to which the company cannot make payments to customers.
Against this background, the price of bitcoin fell below $23,000, and the market capitalization decreased to less than $1 trillion. However, experts attributed this to maro-economic conditions.
Georgetown University Law Professor AdamLevitin suggested that Celsius's bankruptcy was likely inevitable. The media reported that the platform's major investors refused to provide additional funding.
On June 17, crypto-financial service provider Babel Finance announced it was suspending payouts and withdrawals from its own products due to a lack of liquidity.
There have also been reports of problems withsolvency of one of the leading hedge funds in the industry, Three Arrows Capital (3AC), which owns shares in many projects. Company co-founder Su Zhu said the problems are being resolved.
However, the head of trading at 8 Blocks Capital, Danny Yuan, accused the company of using client funds to cover margin calls.
According to The Block, 3AC helped create DeFiance Capital, and the latter operates as a «sub-fund and share class» companies.
On June 15, Cheong tweeted a crying emoji, to which editor Frank Chaparro responded:
«You will overcome this».
One user confirmed that 3AC has incubated the venture capital firm and owns a stake in it or wholly.
Let us remind you that the crypto-lending platform BlockFiliquidated at least some of 3AC's positions, according to the Financial Times. The firm's CEO, Zach Prince, said they "made their best business decision with a client that was unable to meet its obligations on an overcollateralized margin loan."
Read ForkLog bitcoin news in our Telegram - cryptocurrency news, courses and analytics.