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    Three Arrows Capital’s Stablecoins Are in Transit – What is Happening?

    With the risk of facing many legal battles with creditors, Three Arrows Capital has transferred a large number of its stablecoins to KuCoin, according to a recent report.

    PeckShield, a blockchain security and analysis firm, revealed that Three Arrows Capital (3AC) has transferred a significant amount of its crypto assets to the KuCoin exchange. These assets include $20 million worth of USD Coin (USDC) and $10 million worth of Tether (USDT).

    Additionally, another 20 million USDT seems to be moved to KuCoin earlier. On Twitter, there is speculation that 3AC is preparing for a large transaction to offset the losses it has suffered over the past few weeks.

    Three Arrows Capital Files for Bankruptcy

    The move came after 3AC filed for Chapter 15 bankruptcy protection in the U.S. This filing is intended to protect hedge fund assets in this country during liquidation.

    In late June, a British Virgin Islands court ordered 3AC’s assets to be liquidated after after it defaulted on a large chunk of its loans. The court appointed two senior members from consulting firm Teneo to handle this liquidation.

    In addition, 3AC Hedge Fund was also steeply fined by the Monetary Authority of Singapore (MAS) for not notifying the changes in equity positions and making false statements about its asset size.

    Long List of Creditors

    Three Arrows Capital’s woes has begun after TerraUSD (UST) lost its peg to the US dollar. Accordingly, 3AC had purchased $200 million worth of LUNA to raise funds from the Luna Foundation Guard (LFG) in November, and the massive drop in the asset’s price triggered the hedge fund crisis.

    Specifically, Three Arrows Capital defaulted when it was unable to repay a $670 million loan to Voyager Digital, while BlockFi liquidated another $400 million loan. Zac Prince, BlockFi CEO said: “BlockFi can confirm that we exercised our best business judgment recently with a large client that failed to meet its obligations on an over-collateralized margin loan.”

    Other creditors include Deribit and Blockchain.com, which pledge to “hold [3AC] accountable to the fullest extent of the law.” Analysts have warned that market participants should brace for the ripple effect of the 3AC collapse, as a liquidity crisis spreads widely through the ecosystem.

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