Major Crypto Fund Three Arrows Capital Nears Insolvency Amid Massive Liquidations
Three Arrows Capital faces potential insolvency after suffering at least $400 million in liquidations from crypto lenders. The firm is now attempting to repay counterparties while on-chain data shows it is selling off crypto assets to manage significant debt.
Dubai-based crypto fund Three Arrows Capital (3AC) faces possible insolvency after incurring at least $400 million in liquidations from crypto lending firms. The prominent investment fund currently works to repay its lenders and other counterparties as financial troubles mount across the digital asset sector.
The firm's deep troubles stem largely from its heavy investments in major tokens like ether, solana, and luna, which are down significantly from their lifetime highs. On-chain data reveals that 3AC is actively selling its existing crypto positions to lower collateral requirements, with one wallet alone showing a total debt of $183 million.
3AC co-founder Su Zhu addresses the ongoing crisis on social media by stating that the company is communicating with relevant parties and is fully committed to resolving the situation. This potential collapse occurs alongside growing insolvency concerns regarding crypto lender Celsius, raising fears of wider contagion risks throughout the cryptocurrency market.