Faced with allegations of using customer funds to meet margin calls, ThreeArrowsCapital is seeking to sell or bail out assets. The Wall Street Journal Reported on June 17th.
Hedge funds have hired legal and financial advisors to find solutions for investors and creditors, co-founder Kyle Davis told The Wall Street Journal. This decision will be made after the company suffered significant losses as the crypto market began to spiral further downwards on June 10.
Davis told the WSJ:
“We have always believed in cryptography, but it is still the case.
We are committed to solving things and finding a fair solution for all our members. “
In April, ThreeArrows Capital had approximately $ 3 billion in assets under management. Later, TerraUSD (UST) collapsed and hit hedge funds hard.
Three Arrows has reached an agreement with creditors and is trying to buy more time to make plans. The WSJ reported that the fund continues to operate in search of possible solutions.
Three Arrows was one of a group of investors who participated in a $ 1 billion token sale by the Luna Foundation Guard, a nonprofit organization behind the Terra ecosystem earlier this year. Hedge funds have invested approximately $ 200 million in Luna as part of their transaction. The funds formed a reserve that should help UST maintain its peg to the US dollar. When the UST collapsed, Threearrows’ investment evaporated within a few days, despite all its reserves being put in.
Davis told the WSJ:
“The situation at Terra-Luna was very surprised to us.”
Three Arrows managed to stabilize against Luna’s loss, but the sharp decline in the crypto market since last week exacerbated the problem for the company, Davis told The Wall Street Journal. He added:
“We weren’t the first to be attacked … this is all part of the same transmission that affected many other companies.”
Davis mentioned the issue of Celsius, who suspended withdrawal and transfer on June 13 because of “extreme market conditions.”
Three Arrows is in the process of measuring the overall range of losses and assessing current assets, including investments in cryptocurrency startups, Davis told WSJ.
Hedge funds had significant exposure to the Grayscale Bitcoin Trust recovering from losses in the midst of market downturn. In addition, Three Arrows was betting a large amount of Ethereum (ETH) on the Lido protocol. It also fights the issue of bet Ethereum (stETH), which is sold at a discounted price to ETH instead of one-on-one.
Investors with three arrows include institutional investors and wealthy clients, and Nicole Yo, a partner at law firm Solitaire, who advises hedge funds, told WSJ. Yeo added that the company is always up to date with the Monetary Authority of Singapore, the country’s financial regulator.
Three Arrows was based in Singapore until last year, after which it moved to the British Virgin Islands.
