Billions of dollars have been destroyed from the cryptocurrency market over the past few weeks. Industry companies are experiencing pain. Credit and trading firms are facing a liquidity crisis, and many firms have announced layoffs.

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The main cryptocurrency hedge fund Three Arrows Capital has been liquidated, CNBC was told by a man aware of this, which has become one of the biggest victims of the latest so-called “winter crypto”.

Teneo has been brought on board in recent days to deal with the liquidation process, said a man who requested anonymity because they are not authorized to discuss the matter publicly.

Sky News was the first to report on the history of the liquidation.

Three Arrows Capital, or 3AC as it is also known, did not respond to a request for comment when contacted by CNBC.

Teneo is at the earliest stage of the liquidation process, the man said. The restructuring company is taking steps to sell 3AC assets, after which it will open a website in the next day or two with instructions on how lenders can contact the claims, the source added.

3AC, co-founded by Zhu Su and Kyle Davis, is one of the most famous crypto hedge funds (which focus on investing in digital assets such as cryptocurrencies) and is known for its high credit rates. Zhu has extremely bullish views on bitcoin.

But the fall in digital currency prices, which has led to the destruction of billions of dollars from the market in recent weeks, has damaged 3AC and exposed the company’s liquidity crisis.

On Monday, 3AC announced a default on a loan from Voyager Digital of $ 350 million in stablecoin pegged to the US dollar, USDC and 15,250 bitcoins worth about $ 304.5 million at today’s prices.

3AC was exposed to a broken terraUSD algorithmic stemcoin and a related luna token.

Earlier this month, the Financial Times reported that U.S. crypto creditors BlockFi and Genesis had liquidated some of the 3AC positions, citing people familiar with the matter. 3AC borrowed from BlockFi but failed to meet margins.

A margin requirement is a situation in which an investor must allocate more funds to avoid losses on transactions made with borrowed funds.

The promotion of 3AC has raised fears of infecting parts of the market that could potentially be exposed to the company.

Other cryptocurrency companies have also faced liquidity problems. Credit company Celsius and cryptocurrency exchange CoinFlex were forced to suspend withdrawals for customers, citing “extreme market conditions.”

However, CoinFlex had another problem with a customer who was unable to repay a debt of $ 47 million, creating liquidity problems for the company.

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