Blockchain.com to Lose $270M on Loans to Three Arrows Capital

Cryptocurrency exchange Blockchain.com faces a $270 million hit on loans to Three Arrows Capital (3AC), as 3AC, over-leveraged hedge fund, filed for bankruptcy last week, according to a CoinDesk report. 

“Three Arrows is rapidly becoming insolvent and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com,” Blockchain.com’s CEO, Peter Smith said Friday in a letter to shareholders. 

3AC, who is now subject to a liquidation order in the British Virgin Islands, became rapidly insolvent following their exposure to the Terra Network, who had a catastrophic collapse in May. That paired with the ensuing market collapse which plunged Bitcoin and Ether further into a downward spiral was too much for the hedge fund to handle.

About a week ago, it was reported that Blockchain.com was among the creditors that liquidated at least $400 million from Three Arrows Capital. That liquidation was the first public report that announced 3AC's insolvency issues, which led to their eventual bankruptcy. 

Despite not being able to cash in on potentially $270 million in loans given to 3AC, Blockchain.com said they were still solvent and that their customers would not feel the effects of this, according to the report. 

The UK-founded company is one of the longest-running startups in the cryptocurrency industry, as it was founded in 2011. Now, they are headquartered in Luxembourg City, Luxembourg. Earlier this year, the cryptocurrency wallet and financial services company announced a partnership with one of the National Football League’s (NFL’s) most prized teams: the Dallas Cowboys. 

Author: Tyler Irvin

Related Articles