3AC will consider selling assets to save the company

3AC will consider selling assets to save the company

3AC will consider sale of assets to save the company

Three Arrows Capital (3AC) is exploring the possibility of selling assets and “financial assistance” from other companies, and is also trying to negotiate with creditors to defer payments. This was reported by The Wall Street Journal with reference to hedge fund co-founder Kyle Davis. 

Against the backdrop of the collapse of the cryptocurrency market, information about the insolvency of 3AC appeared on the network. The company actively used high-risk DeFi tools and made a number of unsuccessful investments, including the LUNA cryptocurrency, which depreciated.

Terra's death spiral: how and why LUNA and UST crashed

Davis explained to the WSJ that 3AC has hired legal and financial advisors to work out a solution for its investors and creditors. According to him, the structure has not stopped operations.

“We have always believed in cryptocurrencies and still do. We intend to look into the situation and find a fair solution for all our clients,” he said.

The co-founder of the hedge fund revealed that, as part of the February token sale, the structure invested about $200 million in LUNA. After the collapse of the Terra ecosystem, this amount was almost written off.

“The Terra/LUNA situation took us by surprise,” he added.

Davis stressed that 3AC was able to withstand the collapse of LUNA, but the cascade of adverse events that followed, which caused the collapse of the cryptocurrency market, made the situation worse.  

According to him, Three Arrows Capital is still trying to calculate its losses and value illiquid assets, which include venture capital investments in private companies and start-ups.

Nicol Yeoh, managing partner at law firm Solitaire LLP (advises 3AC), told the WSJ that investors in the hedge fund are institutional and wealthy individuals. He added that Three Arrows Capital is keeping the Singapore Monetary Authority informed of developments. 

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Earlier, the media reported on the liquidation of 3AC positions by its counterparties. The BitMEX, FTX and Deribit platforms, as well as the cryptocurrency lender BlockFi, took this step.

Recall that on June 16, the trading company 8 Blocks Capital accused Three Arrows Capital of using client funds to cover margin calls.

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