Blockchain.com Could Lose $270mln as Three Arrows Hedge Fund Stares at Bankruptcy
Blockchain.com, a company that provides crypto wallets, stated Friday that it is staring at a huge loss because of its exposure to failed hedge fund Three Arrows Capital (3AC), which failed to fulfill a margin call recently.
Blockchain.com’s CEO Peter Smith “As of this writing, three arrows is bankrupt and has defaulted on around $270 million worth of bitcoin and US dollar debts from Blockchain.”
In addition, he said that Blockchain.com is actively investigating all possible options to recoup any likely losses. The cryptocurrency sector has been jolted by the giant cryptocurrency hedge fund’s obvious failure to meet its financial obligations. A number of prominent cryptocurrency brokers and lenders have revealed that they have suffered enormous losses, which has prompted some firms to declare bankruptcy.
A crypto lender and dealer known as Genesis disclosed a few days back that it has exposure to a financial institution known as Three Arrows Capital. After the cryptocurrency hedge fund was unable to fulfill a margin call last month, the CEO of the business said that they liquidated collateral and hedged the risk of the situation. He also said that the company’s loans to 3AC were subject to a weighted average margin need of more than 80 percent, although he did not reveal the total sum that was lent.
A few days after it served 3AC with a legal notification to collect around $660 million that it had reportedly given to the Singapore-headquartered hedge fund, the TSX-listed cryptocurrency dealer Voyager Digital also followed suit by filing for bankruptcy protection. Voyager has stated that it has engaged with attorneys to explore possible alternatives, including filing charges against 3AC, in the circumstance that the venture fund, which experienced a significant liquidity crisis, is not in a position to service its debt. Voyager’s statement came after 3AC announced that it would not be able to afford to settle its debt. This announcement comes just a few short weeks after Blockchain.com stated that it is in the process of conducting interviews with investment bankers regarding the possibility of going public as early as 2022.
However, the firm has not yet made an ultimate decision, and there is a possibility that its intention to have an initial public offering (IPO) may be altered. Furthermore, the public debut may be delayed until the following year. Macrina Kgil, the CFO (chief financial officer) of Blockchain.com, said in an interview with Forbes in 2021 that the company is contemplating going public, however there are no urgent intentions for action, so the information should not startle.
It is reported that Blockchain.com, which is headed by CEO and co-founder Peter Smith, has registered about 73 million cryptocurrency wallets and more than 31 million validated users from over 200 different countries. Additionally, it claims that it has a market share equivalent to 28 percent of all bitcoin-related trades.
At the beginning of 2022, Blockchain.com completed its Series D funding stage and received an unknown amount of money at a value of a staggering $14 billion. The most latest post-money value is over twice the $5.2 billion estimate that Blockchain had when it raised $300 million as part of its Series C fundraising stage in March 2020. But what’s even more intriguing is that this earlier estimate came only one month after the firm had completed a financing round in which it received $120 million and was evaluated at $3 billion.