The Three Arrows Capital (3AC) fund could face default after substantial liquidation. Sources say that 3AC has “a total liquidation value of at least $400 million,” and hedge fund founder Su Zhu tweeted about “communicating with stakeholders.”
Three Arrows Capital (3AC) insolvent
According to a recent report, crypto hedge fund Three Arrows Capital Ltd. founded by Su Zhu and Kyle Davies in 2012 may be on the verge of default. The Block’s Frank Chaparro reported that sources commented 3AC may have been liquidated for around $400 million.
The sources also noted that Three Arrows Capital has “maintained limited communication with its counterparties since being liquidated.” Dune Analytics data indicates that 3AC’s portfolio allocation is around $372.47 million, and that number has seen a 24-hour change of about $139.12 million.
While it’s portfolio includes tokens such as AAVE, BAT, CEL, FTT, GUSD, LIDO, and LINK, US$166 million is currently being converted into USD (USDC). The second largest 3AC allocation is held as a serum (SRM) as the hedge fund holds $46.3 million in SRM.
Three Arrows Capital has also been invested in the Terra token ecosystem and it is said to have lost significant capital from the LUNA and UST crash. Meanwhile, as there has been no official word from 3AC about the possibility of the hedge fund going into default, 3AC co-founder Su Zhu has released a vague statement about the situation.
“We are in the process of talking to our stakeholders and are fully committed to resolving this issue,” said the co-founder Three Arrows Capital. Prior to that announcement, Su Zhu had not posted a tweet since June 7. Many crypto investors questioned that statement, but Su Zhu did not respond to any tweets. The other 3AC co-founder, Kyle Davies, stopped tweeting on June 9.
The Three Arrows Capital liquidation and insolvency are among the bad news for the crypto community at the moment. Especially given the issues surrounding Celsius, Justin Sun and Tron’s USDD stablecoins are wobbling, Microstrategy’s massive losses and the upcoming Federal Reserve meeting could see one of the biggest federal funds rate hikes in history.
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