DeFiance Capital CEO Says Three Arrows Capital (3AC) Liquidation Has Affected Its Business Materially
- Cheong also claimed that DeFiance Capital suffered from prejudice as another consequence of the liquidation.
On Friday, crypto hedge fund DeFiance Capital announced that the liquidation of Three Arrows Capital caused them some ‘material loss.’ The company announced this by sharing a screenshot of its official statement about the matter on Twitter.
He added that DeFiance and its CEO, Arthur Cheong, were completely unaware of the state of finances’ of 3AC. Hence, they only discovered 3AC’s liquidity issues when the news became public last month.
Cheong also claimed that DeFiance Capital suffered from prejudice as another consequence of the liquidation.
However, Cheong restated his commitment to ensuring that DeFiance recovers all its assets with 3AC. Then, he would take new steps to protect and preserve these assets. When the news about 3AC’s insolvency issues became public last month, DeFiance’s official statement was that it was taking steps to address the situation.
DeFiance and 3AC Business Relationship
The statement explains that DeFiance is entirely different from 3AC. It also clarifies that DeFiance didn’t raise any of the assets it manages from 3AC or anyone associated with 3AC. The statement further said that DeFiance Capital CEO, Arthur Cheong, has neither been involved in any management capacity at 3AC nor been a director of that company at any time.
3AC made a bankruptcy filing at the beginning of this month in New York. Before that filing, a court in the British Virgin Islands territory had ordered the liquidation of 3AC’s branch in the country.
The 3AC liquidation has negatively affected many crypto firms. Crypto market maker and lender, Genesis, reported a loss of hundreds of millions. Genesis couldn’t report an actual figure because hedging may have offset some of its losses.
Also, it has been making efforts to get partial repayments from counterparties. Besides its loss to 3AC, genesis had previously announced that it made a massive loss during the current crypto winter. Crypto lending firm, Voyager Digital, is another crypto firm suffering from the effect of 3AC’s liquidation.
Voyager digital filed for bankruptcy after 3AC couldn’t repay voyager a loan of $670 million. 3AC suffered huge losses following the sudden crash of the terra network two months ago. Before its issues, 3AC was one of the biggest crypto hedge funds.
It is worth noting that a previous caption on the DeFiance Capital website reads, “DeFiance Capital is a sub-fund and share class of Three Arrows Capital.” Hence, it is surprising that DeFiance states it has no relationship with 3AC.
DeFiance Capital declined comments on the change or answered any other related questions. This fund’s dissociation statement from 3AC is similar to the one issued by TPS capital. TPS capital is another known 3AC affiliate.
Until last week, TPS’ LinkedIn page stated that it is an over-the-counter trading subsidiary of 3AC. However, it now prides itself as an independent company under different management.