Crypto Markets Slump Again as 3AC is on the Verge of Bankruptcy



Three Arrows Capital (3AC) appears to be the next victim of this year’s bear market, after defaulting on a $660 million loan.

More degen game reports

There are reports that the 3AC fund was badly hit by the Terra/Luna collapse in May. Via Twitter, Terra Researcher and serial whistleblower FatMan reports that 3AC’s problems only got worse when a leveraged long position in Bitcoin began to liquidate.

The resulting flash crash also affected other companies like Genesis, BlockFi, and BitMEX. Trying to raise more cash, 3AC then began applying for loans, though without revealing the dire state the hedge fund was already in. Fatman writes:

During the collapse, in a desperate bid for liquidity, 3AC solicited BTC from whales and trading companies. They lied about the fund’s AUM, didn’t disclose degeneracy for long, and promised an estimated 20% return on everything they got. Most bottoms smelled like a rat.

The allegations don’t end there, however. According to a recent Makeshift itemresearch firm FSInsight said 3AC’s high-leverage positions were reminiscent of an “old-fashioned Madoff-style Ponzi scheme.”

3AC defaults on Voyager loan

The largest lender to Three Arrows Capital was Voyager Digital with an under-secured loan worth 15,250 BTC and 350 million USDC, for a combined sum of around 660 million USD, which was due to arrive on Monday.

In Mondays Press release, Voyager has announced that it has issued a notice of default to 3AC and is now seeking legal remedies to recover the loaned assets. FatMan estimates that 3AC has accumulated $1.6 billion in net debt to date.

This may have been the final straw for crypto broker Voyager. After struggling to maintain its market valuation for the past year, shares of Voyager Digital have fallen more than 73% in the past week alone.

Celsius always silent

Earlier this month, lending platform CeFi Celsius suspended all withdrawals, after also facing a liquidity crisis. The childcare provider has remained silent on social media since June 20, fueling insolvency fears. Apparently, their attorneys are pressuring Celsius to file for Chapter 11 bankruptcy. Market InsiderGoldman Sachs is prepared to invest $2 billion in Celsius’s assets in the event of bankruptcy.

Going through Twitter, Digital Assets Data co-founder Mike Alfred claimed Celsius CEO Alex Mashinsky attempted to flee the United States on Monday but was arrested by authorities. This was however denied by Celsius. Many Twitter users who support a continued short compression of the $CEL token accuse Alfred of spreading false information to induce FUD.


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