Cryptocurrency exchange Blockchain.com stands to lose $270 million from lending to Three Arrows Capital, the over-leveraged hedge fund now the subject to a liquidation order in the British Virgin Islands.
“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,” Peter Smith, Blockchain.com’s CEO, wrote in a letter to shareholders, reviewed by CoinDesk.
Three Arrows Capital, which boasted billions of dollars in assets under management earlier this year, has imploded thanks to a combination of plummeting crypto prices and poor risk management, with many crypto lending businesses becoming exposed.
Smith pointed out that Three Arrows has borrowed and repaid over $700 million worth of cryptocurrency in the four years that the firm has been a counterparty of Blockchain.com. Smith also emphasized that Blockchain.com “remains liquid, solvent and our customers will not be impacted,” in...
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