Three Arrows Faces Insolvency After Major Liquidations: Report

Three Arrows faces insolvency after a major liquidation with the company being one of the most-vocal crypto participants in the past few years so let’s have a closer look at today’s latest cryptocurrency news.

The Dubai-based fund Three Arrows Capital is facing possible insolvency after incurring about $400 million in liqudations. Three Arrows faces insolvency after it liquidated a huge chunk and it is in the process of repaying lenders and other counterparties. The company’s founders Su Zhu and Kyle Davies were two of the most vocal participants in the crypto space in the past few years and made bets on NFTs, DEFI applications, layer-1 tokens, and crypto companies.

Zhu seemed to address the rumors on Twitter:

 “We are in the process of communicating with relevant parties and fully committed to working this out.”

Tokens listed as investments on the platform include Ether, Luna, SOL and the prices for these are down from 70-99% since the lifetime highs. 3AC’s troubles came amid reports that the crypto lender Celsius might be insolvent. The company managed billions of dollars of user funds and could not possess enough capital to pay the investors. One of the strategies Celsius used involved in the usage of the staked ETH as a derivative tied to the ether that lost the peg and can cause contagion risks. In the meantime, the on-chain data suggests that 3AC is selling existing crypto positions to lower the collateral requirements for certain positions and one of the 3AC wallets also had a debt of $183 million.

As recently reported, The crypto trading firm Three Arrows Capital will move its headquarters to Dubai, United Arab Emirates. The planned move came as the company organized the first-ever fund whcih will take capital from external investors. The company is the latest to eye the Middle East as the regulatory climate in Singapore seems to have soured. Three Arrows Capital co-founder Su Zhu confirmed the move to Dubai.

The Monetary Authority of Singapore as the nation’s central bank and the financial regulator has started cracking down on the crypto activity and added several crypto companies to the investor alert list.  The MAS described the list as a list of unregulated persons that based on the information recieved by MAS, could have been wrongly perceived as being licensed or regulated by MAS. Last fall, the crypto exchange Binance which has operations in Singapore, was added to the IAL and Binance also stepped up its presence in Dubai after getting a license to operate in Dubai as a virtual asset service provider.