Breaking: Crypto Exchange, Blockchain.com Might Lose $270 Million From 3AC’s Insolvency
- Blockchain.com CEO, Peter Smith, wrote to shareholders that the company’s customers wouldn’t be affected by the possible fund loss.
Crypto exchange, Blockchain.com, is facing a $270 million hit due to its loan to three arrows capital (3AC). Last week, a British Virgin Islands court ordered the liquidation of the crypto hedge fund. Based on the court order, Blockchain.com CEO, Peter Smith, wrote to shareholders to explain the exchange’s situation with 3AC. The letter was dated June 24
Smith stated that the exchange would likely lose about $270 million in USD and digital assets due to the rapid insolvency of 3AC. The implosion of 3AC has exposed several crypto firms. Its implosion was caused by the general crypto market downturn and the company’s poor risk management. Early this year, 3AC’s asset under management was worth billions of dollars.
Blockchain.com Faces Collateral Damage
Smith noted that 3AC had been a counterparty to Blockchain.com in the last four years. Within that period, 3AC has borrowed and paid back more than $700 million in cryptos. However, smith clarified that the exchange’s customers wouldn’t feel the effect of these unpaid loans by 3AC. He added that Blockchain.com is liquid and solvent.
Last week, multiple sources reported that Blockchain.com partnered with Deribit (a derivatives exchange) to seek the liquidation order for 3AC at the British Virgin Islands court. Late last month, smith told Bloomberg that 3AC had cheated the crypto market participants.
However, Blockchain.com won’t mind taking all legal means to ensure that 3AC faces the consequences of its actions. Nevertheless, inside sources with full knowledge of the exchange’s financial state told the media that the losses wouldn’t affect the company.
Their affirmations confirm what the exchange’s CEO has previously stated. The inside sources added that there are no indications that the firm’s finances are distressed. The exchange, whose headquarters is in Luxembourg, started operations in 2011. Thus, making it one of the oldest crypto firms in the industry. It owns one of the oldest web browser wallets and Blockchain explorers.
On the Flipside
Earlier in the year, Blockchain.com became the second crypto firm to sponsor a team in the US National Football League (NFL). It is the major sponsor of the Dallas Cowboys. Socios (a fan token platform) was the first to sponsor a US NFL team when it signed a partnership deal with the New England Patriots in November 2021.
However, the partnership is yet to generate any fan token. In March this year, the NFL suspended the ban on all crypto sponsorship deals. The ban lasted six months (September 2021 to March 2022). However, under the new law, cryptos must not be promoted when crypto firms sponsor any NFL team.
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.”
