Skip to main content

Crypto hedge fund Three Arrows Capital (3AC) files for bankruptcy

 


Crypto hedge fund 3 Arrows Capital is set to become another pillar of bear market headlines in 2022, joining the ranks of brutal bear market moments that include the sinking of Terra Luna and the CeFi drama.


While rumors about the status of 3AC have been circulating for several weeks, only a few details with concrete information have been released so far. That will change this week as new reports show that 3 Arrows Capital has filed for Chapter 15 bankruptcy in New York.


Dozen Headaches & 3 Arrows files for bankruptcy

Everything can be rosy and sunny in a bull market -- and 3 Arrows certainly saw that with around $10 billion in AUM at the start of the year. However, as market structures have changed this year, business operations have also changed.


The revelations began in early June with speculation that 3AC had defaulted on payments owed, most notably about $80 million to derivatives exchange Deribit. After 3AC co-founders Zhu Su and Kyle Davies were silent for about a week, Su posted this tweet , essentially confirming that 3AC was facing serious liquidity problems.


Since then, it's been one after the other. CeFi platform Voyager Digital said it could lose more than $650 million in the collapse of 3AC , according to the Financial Times , and the platform has since suspended withdrawals and trading. The other CeFi provider BlockFi also suffered losses of around $80 million, according to the Times.


This week, 3 Arrows filed for Chapter 15 bankruptcy in New York. Chapter 15 is designed to handle “cross-border bankruptcies.” The strong headwinds for Bitcoin this year is an example of the challenges the crypto market has had to deal with of late.


State of CeFi: Pulse Check

Centralized financial platforms, commonly referred to as CeFi, aim to take the utility of DeFi and integrate user-friendly mechanisms and UI to attract consumers with aggressive returns. However, a number of these companies are surrounded by speculation, as speculators believe their credit is at high risk and their liquidity volatile.


And then comes the next problem: even if liquidity is not an immediate concern for a CeFi platform in a downturn, users' belief in potential liquidity problems leads to a "bank run" and now liquidity becomes an issue due to mass withdrawals.


Many believe that some CeFi platforms have employed riskier processes to generate returns, adding another layer of complexity.

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BNB, ZEC, USDT, FEY, 25 Claims Daily

Comments

Post a Comment

Popular posts from this blog

The 5 largest platforms for non-fungible token (NFT) collectibles

  Since the beginning of 2021, non-fungible tokens (NFT) have had no holding back and the sector is setting new records almost every day.  More and more artists, stars and brands are realizing the potential - NFT are well on their way to catapulting the crypto space into the mainstream.  But which collectibles are currently the most popular? What are NFT? NFT are unique tokens that cannot be exchanged one-for-one for an equivalent token.  Any asset that is tokenizable can be an NFT.  This includes, for example, (digital) works of art, trading cards, game items and crypto domains.  Theoretically, however, real estate or securities can also be mapped as NFT. NFTs can be used to transparently map ownership structures on a public blockchain.  This allows them to store value just like real objects, even if additional copies are easy to make.  For example, the original picture of the Mona Lisa is significantly more valuable than a photo, as everyone kno...
11 comments
Read more

CARDALONIA: THE CARDANO METAVERSE OPENS THE GATES!

  Have you ever been to Cardalonia? With these words, the Cardano Metaverse called Cardalonia starts the gates. In this 3D world, developers and users can interact with each other. First of all, users have to create an individual character with which they can move online. After that you can enter one of the worlds built by developers with this character. You can also purchase your own land in the Cardano Metaverse via the marketplaces in Cardalonia . This is secured by Cardano's blockchain technology and therefore offers a relatively secure transfer of ownership. Since these are only digital plots of land, it is not yet entirely clear when the plots of land are purchased whether they can also be sold again in the future. A possible profit cannot be estimated at the moment. In Cardalonia, the cryptocurrency Lonia is used. The maximum amount of tokens in circulation is 100,000,000. The team consists of Alice Sand (Co-Founder), Vasil Air (CTO) and Dustan Water (Fullstack Developer). T...
Post a Comment
Read more

Cardano: This is the vision that founder Charles Hoskinson has

  The Altcoin Cardano has tended to decline in recent weeks.  The Alonzo upgrade was supposed to bring improvements, but it soon turned out to be a disappointment.  Cardano founder Charles Hoskinson presented his vision for the cyber motto in a live Twitter video. • Cardano in the last few months under pressure • Charles Hoskinson explains his Cardano vision via Twitter • Security and privacy at the center The cryptocurrency  Cardano  has had a difficult few months.  While founder Charles Hoskinson's cyber motto has had a strong run in 2021, it has been steadily downhill in recent months.  Cardano is faced with some difficulties.  The so-called Alonzo upgrade went live in mid-September, for which crypto fans had high hopes, but which soon turned out to be a disappointment.  The upgrade should make it possible to use smart contracts on the cryptocurrency as well.  It soon turned out, however, that although these were entered into Cardano,...
Post a Comment
Read more