Blockchain.com Named as Latest 3AC Victim; DeFiance Capital Considers Legal Action

Blockchain.com Named as Latest 3AC Victim; DeFiance Capital Considers Legal Action
Images: Envato
12 July 2022

Trouble continues to brew for Three Arrows Capital (3AC) and those attached to it. In the most recent chapter of the 3AC debacle, cryptocurrency exchange Blockchain.com has been revealed as the latest player exposed to the crumbling crypto lender.

According to CoinDesk, Blockchain.com stands to lose US$270 million from lending to 3AC, whose offices remain empty as their founders’ whereabouts are still unknown.

“Three Arrows is rapidly becoming insolvent and the default impact is approximately $270 million worth of cryptocurrency and U.S. dollar loans from Blockchain.com,” Blockhain.com CEO Peter Smith said in a letter to shareholders.

Earlier this month, 3AC filed for Chapter 15 bankruptcy following the LUNA crash.

Read more: 3AC Enters Liquidation – What Happens Next?

3AC borrowed and repaid over US$700 million worth of crypto in the four years of its partnership with Blockchain.com

Smith stated that Blockchain.com nonetheless “remains liquid, solvent and our customers will not be impacted.”

CoinDesk also reported that a person familiar with the Blockchain.com’s finances said they are “not getting the sense there is any kind of stress on the organization.”

Most recently, Crypto fund Mirana Ventures revealed it is taking 3AC to court in Singapore over a loan it extended to the beleaguered crypto hedge fund and one of its subsidiaries. A week earlier, the firm was reprimanded by the Monetary Authority of Singapore (MAS) for providing false information and for managing more assets than it was allowed to under Singapore’s rules.

Read more: Creditor Goes After 3AC in Singapore Court

Meanwhile, Singaporean web3 venture capital firm DeFiance Capital is reportedly considering taking legal action against 3AC. Said action could come in the form of arbitration, a lawsuit or an amendment to the bankruptcy proceeding seeking repayment as a creditor. 

DeFiance Capital was incubated by 3AC, with the pair forming a number of co-investment deals together such as stakes in dYdX and Orca.

3AC played a crucial role in the launch of DeFiance Capital in September 2020 by providing back- and middle-office support, as well as consultations.

However, it remains unclear how or whether 3AC seeded DeFiance or the extent to how deep the duo’s projects run.

Read more: DeFiance Capital’s Arthur Cheong Answers DeFi’s Unanswered Questions

Blockhead Team
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