Crypto Market Starts Bleeding More With 3AC Liquidation News
- Voyager insisted on the repayment of $25 million USDC from 3AC by June 24. However, it later rescinded the decision and subsequently proposed that the entirety of the loan be repaid by June 27.
As a result of the financial crisis bedeviling Three Arrows Capital (3AC), a court in the British Virgin Islands has immediately directed its complete liquidation. Thereby triggering a new wave of crypto sell pressure. The total crypto market cap is down over 5 percent today at around $938 billion, with Bitcoin retracing below $20 again.
What will become of the firm’s creditors is not certain at the moment, but seeing 3AC go into liquidation will create more controversies. Questions are likely to emanate from regulators who have been skeptical about the nature of the industry. Possibly, it’s likely to take a more hard stand against the cryptocurrency industry.
Challenges Facing 3AC
The co-founder of 3AC, Kyle Davies in an interview with Street Journal this month reiterated the commitment of the firm to securing workable solutions to its prevailing crises. According to him, the cryptocurrency-focused hedge fund is seriously harnessing equitable solutions, including the sale of assets or a bailout by another firm.
As of press time, there is still uncertainty over the current status of the assets put forward for sale by its liquidators. However, sources say a court directive has been issued in the BVI on Monday to liquidate the hedge fund. Although, neither Three Arrows Capital nor the Co-founder has responded to the development.
Worth noting, that Voyager gave a defaulting notice to 3AC some days back following the firm’s inadequacy, to effect the mandated payments on a loan. Voyager disclosed that the loan amounts to 15,250 bitcoin, equivalent to $324 million and about $350 million USDC.
Voyager announced its intention to embark on measures capable of fostering the recovery of the loan from 3AC. Worth noting, that Voyager Digital consulted its legal team to find a way of recovering the loans within a legal jurisdiction. 3AC remains one of the crypto firms currently enduring turmoil following the market downturns that have ravaged the industry. According to a report last week by Wall Street Journal, 3AC intends to sell some of its assets.
More so, the hedge fund firm is reportedly seeking a bailout from other firms. A financial times report confirmed that 3AC failed to meet margin calls last weekend.
As revealed, the hedge fund hired legal and financial advisers to help work out a remedy for investors and lenders. Till now, the organization is yet to make any official response to the notice issued by Voyager Digital.
At first, Voyager insisted on the repayment of $25 million USDC from 3AC by June 24. However, it later rescinded the decision and subsequently proposed that the entirety of the loan be repaid by June 27. A deadline 3AC failed to meet.
Currently, Voyager has received a financial intervention in the form of a $500m loan from Alameda Research. However, Voyager has not followed the trend set by other crypto lenders like Celsius Network and Finblox, in halting withdrawals. Though, it has lessened its daily withdrawal limit from $25,000 to $10,000.
Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
