Blockchain.com faces $270M hit on loans to bankrupt Three Arrows
Cryptocurrency exchange Blockchain.com could lose $270 million on its loans to bankrupt crypto hedge fund Three Arrows Capital (3AC), a source with knowledge of the matter said on Friday.
The development comes days after 3AC filed for Chapter 15 bankruptcy, seeking protection from creditors in the United States after one of the most high-profile blow-ups of the crypto crash this year.
“Three Arrows is rapidly becoming insolvent and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com,” Blockchain.com’s Chief Executive Officer Peter Smith said in a letter to shareholders, according to a company spokesperson.
The news was first reported by CoinDesk.
Earlier this week, digital asset exchange Genesis Trading also said it had been exposed to 3AC, but had mitigated its losses after the hedge fund failed to meet a margin call.
Aggressive rate hikes by the U.S. Federal Reserve and recession fears have led to a turmoil in equities and sparked a selloff in cryptocurrencies. The crypto winter has hit several companies in the sector including lending platform Celsius Network and Voyager Digital VOYG.TO.