Kyle Davies, the co-founder of the investment fund, told the wall street journal that his fund is considering selling assets and bailing out.
Will Three Arrow Capital (3AC) be the first crypto investment fund to go out of business? The situation of this fund deteriorated in the space of a few days.
On Wednesday, the question of the solvency of this fund had been pointed out by many specialized media, including The Block. According to this newspaper, the Singaporean investment fund was looking for a way to reimburse some lenders who had liquidated their positions in 3AC for the amount of $400 million, following the fall in cryptocurrencies. On the same day, fund co-founder Zhu Su had noted be in discussion with certain “appropriate parties”.
Since then, the fund had given no further news. He has just broken the silence: according to the wall street journal3AC plans to sell assets and bail out after seeking legal and financial advisers.
“Three Arrows is exploring different options, including selling assets and bailing out another company, Kyle Davies said. The fund hopes to reach an agreement with creditors that would give it more time to develop a plan. still in business as it searches for a solution”, underlines the media.
“The Terra-Luna situation caught us off guard”
The newspaper further reveals that the group had $3 billion in assets under management last April before the collapse of the Terra ecosystem last month. However, the fund had invested 200 million dollars in this ecosystem before its fall.
“The Terra-Luna situation caught us off guard,” admitted the fund’s co-founder.
However, in addition to its connection to the Terra ecosystem, 3AC remains one of the biggest investors in the crypto ecosystem. The bottom has invested in blockchains like Bitcoin and Ethereum but also in decentralized finance (DeFi) protocols like Aave and Lido, the main platform on which users can deposit ether in exchange for interest (paid in stETH).
So inevitably, in a situation of general fall in the cryptocurrency (and protocol) market, the fund can only be in bad shape.
“Credit conditions have tightened markedly as digital asset values have fallen generally, leading some lenders to demand partial or full repayment of loans they previously made to cryptocurrency investors. “, underlines the newspaper.