BlockFi, Crypto.com, and Others Come Forward Amid Three Arrows Turbulence, Babel Finance Pauses Withdrawals
After several days of intense discussions and rumors circulating about insolvency at major crypto hedge fund Three Arrows Capital, more details about the financial exposure other companies in the space have had to the hedge fund have emerged, with crypto lender BlockFi being named as one counterparty affected.
According to a Financial Times report, Three Arrows Capital has failed to meet margin calls from several crypto lenders in recent days. Citing “people familiar with the matter,” the report said these lenders included BlockFi, which was said to have liquidated “at least some” of Three Arrows Capital’s positions.
Around the same time as the FT report came out, BlockFi’s CEO Zac Prince confirmed on Twitter that his firm has “a large client that failed to meet its obligations” on an “overcollateralized” loan.
“We fully accelerated the loan and fully liquidated or hedged all the associated collateral,” Price said in the tweet, before adding:
“No client funds are impacted. We believe we were one of the first to take action with this counterparty.”
Prince has so far not confirmed who the “large client” he referred to is.
The news of the liquidations came as on-chain data shared by the blockchain forensics company PeckShield showed that wallets belonging to Three Arrows Capital on Friday sold stETH 7,110, which represents ethereum (ETH) staked on the Lido protocol, to the stablecoin tether (USDT) at a loss.
Despite being backed one-to-one by ETH staked on the Ethereum Beacon chain (Ethereum 2.0), stETH has traded at a discount to ETH during much of this bear market, while the staked ETH tokens themselves remain locked and inaccessible for now.
As this is developing, Babel Finance, a global crypto financial services provider,
Read more on cryptonews.com
