Cryptocurrency exchange Blockchain.com stands to lose $270 million by lending money to Three Arrows Capital, the leveraged hedge fund that is currently the subject of a liquidation order in the British Virgin Islands.
Due to a combination of falling cryptocurrency prices and inadequate risk management, Three Arrows Capital, which touted managing billions of dollars worth of assets earlier this year, crashed, leaving numerous crypto lending businesses exposed.
“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.
Clients will Note Impacted
In the four years that Three Arrows has been a counterparty of Blockchain.com, Smith said that the company has borrowed and repaid more than $700 million in cryptocurrencies. In the letter dated June 24, Smith also highlighted that Blockchain.com “remains liquid, solvent...
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