Peter Smith – CEO of crypto exchange platform BlockchainCom – said the fallout from VC firm Three Arrows Capital (3AC) could cause his company to lose $270,000,000.
- In a letter to shareholders dated June 24th, Smith said that 3AC had defaulted on $270,000,000 worth of crypto and U.S. Dollar loans from BlockchainCom.
- The CEO claims the firm had reliably borrowed and repaid $700 million in loans from the exchange over the past four years.
- However, 3AC was liquidated on multiple loans last month due to poor risk management. It filed for bankruptcy last week.
- The fallout led to liquidity issues at multiple other crypto lending firms that were counterparties, such as Finblox and Voyager.
- “[BlockchainCom] remains liquid, solvent and our customers will not be impacted,” clarified Smith in the letter.
- Earlier this month, CryptoPotato reported that both BlockchainCom and Deribit were seeking 3AC’s liquidation from a British Virgin Islands Court. The court ordered the firm into liquidation in June.
“We believe Three Arrows Capital defrauded the crypto industry and intend to hold them accountable to the fullest extent of the law,” read a statement from BlockchainCom
- 3AC’s trouble also arguably stemmed from financial contagion dating back to Terra’s collapse in May – a protocol in which it was deeply invested.
- As of now, BlockchainCom is yet to announce any withdrawal freezes or restrictions on customers’ funds, the way CoinFLEX and Celsius have.