Binance refused loan to hedge fund Three Arrows Capital
According to the crypto exchange’s head Changpeng Zhao, 3AC is not the first company to seek their help
23.06.2022 - 12:20
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What’s new? Cryptocurrency exchange Binance has refused to grant a loan to hedge fund Three Arrows Capital (3AC). Earlier, crypto exchanges FTX, Deribit, and BitMEX liquidated 3AC’s positions as it failed to settle margin calls. The fund reportedly owes BitMEX around $6 million. Binance CEO Changpeng Zhao also added that 3AC was not the first company to approach the exchange for a loan, South China Morning Post (SCMP) reports.
What else did Zhao say? Comparing the current situation to the bearish trend of 2018, the Binance chief noted that the current downturn in the cryptocurrency market is characterized by greater liquidity problems that are spreading across the digital assets sector and affecting major industry players among others. In his view, this is due to an increase in the use of high-yield leveraged products in the field of decentralized finance (DeFi).
The 3AC situation. According to The Block’s website data, published on June 15, the fund may face bankruptcy. On June 16, Danny Yuan, CEO of 8BlocksCapital, a trading firm, accused 3AC of stealing $1 million from the company’s accounts. On June 12, during the market crash, 8BlocksCapital asked 3AC to withdraw part of the funds from the accounts, which it did. However, as early as June 13, the fund did not respond to the request to withdraw additional funds. Yuan back then noticed that about $1 million was missing from the account.
Three Arrows Capital is a well-known cryptocurrency hedge fund founded in Singapore in 2012. 3AC invested in crypto, GameFi, and DeFi projects. One of these projects was Praxis, a crypto city-building startup.
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