The massive liquidations that are observed on the crypto markets have got the better of Three Arrows Capital which is currently fighting to stay afloat. On the edge of the abyss, the hedge fund decided to call on financial experts to help it find a solution to satisfy its investors and creditors. Details in the following.
The sale of assets or a takeover by another company
Two months ago, Three Arrows Capital managed approximately $3 billion in assets for its clients who are either high net worth individuals or institutions. With the crisis, the fund is currently negotiating an extension of the collection period with its creditors so that it can examine its options more thoroughly. Two main alternatives are currently available to him to get out of it, namely the sale of its assets or a takeover by another company. These two avenues are studied by newly recruited financial experts who must also consider the continuation of the fund’s activities.
Three Arrows Capital co-founder Kyle Davies said in a recent interview that the company has always believed in cryptocurrency, and still does. He assured that she is “determined to settle things and find a fair solution for all its constituents “. Mr Davies also claimed that the fund continues to do business while it seeks a solution, without providing details on the identity of the partners concerned. However, the fund’s clients hope that these are much more reliable partners than the Luna Foundation Guard.
A short respite
As a reminder, Three Arrows Capital’s problems stem from the collapse of the stablecoin TerraUSD into which it injected $200 million through an acquisition of Luna tokens. The ensuing sell-off in the market caught the hedge fund off guard, as Mr. Davies admitted. The company still managed to overcome the losses Luna suffered by drawing on its own reserves. However, the dizzying fall in the value of bitcoin, Ether (ETH) and other cryptocurrencies in recent weeks has had the effect of throwing the fund back into crisis.
Three Arrows Capital is struggling to reassure its investors and is not ruling out any option in order to be able to meet its commitments as quickly as possible. Bitcoin and Ether’s breakouts below the respective psychological levels of $20,000 and $1,000, however, risk thwarting his plans.
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Luc Jose Adjinacou
Far from having dampened my enthusiasm, an unsuccessful investment in a cryptocurrency in 2017 only increased my enthusiasm. I therefore resolved to study and understand the blockchain and its many uses and to relay with my pen information relating to this ecosystem.