One of the more worrisome issues regarding the current fear of bankruptcy for some centralized lenders and investors is the lack of transparency. The news cycle is full of rumors and theories about Three Arrows Capital (3AC) and Celsius, but there are few verifiable facts that can be reported responsibly. However, some prominent people in the crypto industry working in the field of intelligence have published a detailed analysis.
Is fallout bad as expected?
One of them is Ryan Selkis, the founder of market intelligence company Messari. Twitter space Here, he investigated the information gathered behind the scenes. Serkis downplayed the seriousness of the 3AC crisis and presumed it was around.
“A net debt of $ 1.5 billion in terms of how underwater 3AC is … and basically all the counterparties I talked to are doing business with these guys as usual. It is proof that it was. “
Serkis further explained the crisis, saying, “All FUDs around the sky are falling for Western lenders, who probably think they are overburned now.”
Many funds, projects, and lending platforms will soon move away from Celsius and 3AC this week. Some have come out to confirm the liquidation of a large third party position.Tether publication They were no longer exposed to Celsius because the funds were “liquidated without loss”.Blocks too report “Cryptocurrency exchanges FTX, Deribit, and BitMEX have liquidated their positions in Three Arrows Capital in the past week.”
Both BlockFi and Genesis have created a Twitter thread detailing that they have liquidated a significant number of third parties in the past week. However, neither is specifically named 3AC, so this could be another large crypto company struggling under liquidity and secured loans. 3AC is Block Fi Website Not as an investment partner, but as Genesis. Many, including Ryan Selkis, believe that these positions are actually 3AC, but this is only speculation at this time.
As Selkis suggests, if the total exposure of 3AC is $ 1.5 billion, the direct impact on the market could be negligible. That level of debt is just over 1% of the crypto industry’s total market capitalization, less than the value of Bitcoin dumped by Terraform Labs during the LUNA crisis. In that case, the fall in Bitcoin prices could be a transmission from fear, uncertainty, and suspicion caused by Celsius, Terra, and 3AC, all with a critical moment within a month. I have.
Industry insiders discuss the crisis.
Selkis joined Twitter Space with other prominent CEOs and analysts in the crypto ecosystem, including BlockFi CEO Zac Prince. Given the current state of cryptocurrency lending, Prince said, “The self-regulatory path is not a particularly viable option.” Early in the conversation, he also confirmed that he agreed that the regulation “needs to be resolved” after the current crisis.
Also, Frank Chaparo, the editor of The Block, said that 3AC
“We attacked all trading desks, token projects to profit from GBTC arbitrage trading and knew that the merry-go-round was nearing the end. We thought we could get everything back in one trade. It is. “
Chapparo also confirmed that he spoke to a project that said 3AC had contacted them to undertake:
“Their whole finance to manage the finances of these projects, and the whole finance … they were touted to have three arrows sent. Hundreds of millions of dollars of financial tokens.”
“Some of the terms of these transactions are also very bad,” said Chapparo, suggesting that companies that accept the offer to hold Treasury by 3AC could be seriously impacted. doing. In the first half of the conversation, Selkis noted that these projects are unlikely to move forward at this time. This is because it may lower the price of tokens and reduce their position in future proceedings against 3AC.
“3AC borrowed money from multiple funds and counterparties to anchor and generated yields without telling them. Their UST position can be at least 9 digits before the Terra Depegging event. It was confirmed. “
Three Arrows Capital Website
Interestingly, to access the 3AC website, users Disclaimer I will explain it.
“Because of the risks involved, investing in a Three Arrows Capital Fund is only suitable for sophisticated investors who can bear the loss of a significant portion or all of their money in the fund without changing their standard of living.”
The wording of this clause is a bit strange because it refers to “standard of living” as an important indicator. This phrase could be the main focus of future proceedings, as counterparties may reasonably claim that living standards have declined after losing hundreds of millions of dollars.
The whole situation is a mystery. This is a difficult position to accept in an industry accustomed to the transparency of on-chain transactions. To regain confidence in the market, we need to be more transparent. Investors currently have no idea where to put money to get a small yield. Cryptocurrency wallets are one of the safest places to store money in times of chaos, and many reaffirm their motto, “not keys, not coins.”
