Crypto lending firm Three Arrows Capital (3AC) had positions liquidated by crypto exchanges Deribit, BitMEX and FTX.
What Happened: Over the past week, 3AC has faced liquidations in positions in Bitcoin derivatives. As revealed by The Block, 3AC currently owes $6 million to BitMEX. Furthermore, it was revealed that the positions liquidated by FTX and Deribit were relatively smaller than the liquidation by BitMEX.
Due to uncertain market conditions and the large loss on its position in Terra LUNA/USD, 3AC has experienced an extreme liquidity crisis. As crypto prices continued to fall, the company was unable to meet its margin calls.
“The BitMEX legal department is in contact with 3AC regarding next steps,” a BitMEX representative told The Block.
The FTX spokesperson denied making any public comment about the liquidation unless required to do so by law. Deribit also kept quiet, but only disclosed: “We can confirm that Three Arrows Capital has been a shareholder of our parent company since February 2020. Due to market developments, Deribit has a small number of accounts with net debt with us that we consider to be potentially distressed. ”
Why it matters: As market conditions continue to deteriorate, many crypto companies face liquidation risks. 3AC is missing its margin calls and facing massive liquidations, is alarming news for investors worldwide given the threat to their funds.
3AC must continue to protect investor funds by ensuring secured asset reserves and by working to prevent margin calls. With more than $400 million in liquidations total, the company must work to protect against absolute insolvency, guaranteeing loan repayments and limiting asset sales.
This post 3 Arrows Capital’s Bitcoin and Other Positions Liquidated by FTX, BitMEX and Deribit; Fund managers are silent was original published at “https://www.benzinga.com/markets/cryptocurrency/22/06/27773234/3-arrows-capital-bitcoin-and-other-positions-liquidated-by-ftx-bitmex-and-deribit-fund-man”