Last March, Singapore crypto giant Three Arrows Capital (3AC) still managed $ 10 billion in assets, making it one of the world’s most prominent crypto hedge funds. Now, it is going to court and is opening bankruptcy proceedings that are putting the entire market in a spin, according to a CNBC report.
● Escape from the crypto: High pull rate knocks down investment giant Singapore
● Crisis caught her: Singapore investment crypto giant collapsed into insolvency
In the background: the decline in the prices of cryptocurrencies (over $ 1 trillion since April) and a particularly risky trading strategy that left it unable to return the money to investors.
The fund’s strategy, which until now was considered one of the oldest in the industry, included receiving loans from all over the industry and investing the funds in other crypto projects, some of them in the beginning.
Therefore, according to reports around the world, the fund’s investors are not the only victims and the shock waves are expected to reach other bodies active in the field. For example, the crypto exchange Blockchain.com is exposed to $ 270 million in loans to the Singapore fund as well as other trading platforms.
The foundation was established in 2012 by Joe Sue and Kyle Davis. Joe is known for his very bullish point of view regarding Bitcoin. He said last year that the value of one Bitcoin currency would reach $ 2.5 million. But last May the falls in the crypto markets began and Joe turned to Twitter and admitted – “My thesis was unfortunate wrong”.
When the problems began, Joe tweeted a vague message on his Twitter account about the company: “We are in the process of communicating with the relevant partners and are fully committed to resolving this.” He did not explain the tweet. Following the announcement, it was reported on various financial websites that two crypto companies that lent money to 3AC withdrew some of their loans.
Then the stable currency Terra and the currency Terra-Luna collapsed. 3AC was exposed to Luna and suffered heavy losses. Davis even admitted that the currency crash “caught us unprepared.”