The crypto hedge fund Three Arrows Capital (3AC) has been ordered to liquidate by a court in the British Virgin Islands. The incident took place after the company 3AC faced a major loss in the recent crypto market.
According to Voyager Digital which is a crypto broker, 3AC was facing issues with loans worth hundreds of millions of dollars. 3Ac was notified to pay a loan of $650 million. Even the crypto app said that 3AC owes them 15.250 BTC (around $325m) and $350m USDC.
The crypto market is facing heightened turmoil and a collapse in assets for a few months. In this hour of crisis, 3Ac was left with two choices, waiting to be saved by other organizations or by selling assets.
3AC was founded by Su Zhu and Kyle Davies in Singapore that faced a tremendous loss following the collapse of Terra blockchain and its native token Luna. Terra blockchain is a producer of token Luna which has a current price of $0.000084. The liquidation occurred once the company failed to meet the margin calls.
In the hour of crisis, a Twitter handle ideated 3AC of incorporating MicroStrategy in order to hike BTC value.
microstrategy is what 3ac looks like with less leverage and less defi
— juthica (@juthica) June 29, 2022
However, it is not deciphered which MicroStrategy she was speaking about. Although there’s a business intelligence software company named MicroStrategy (MSTR) by Michael Saylor that can help them to buy more BTC. Microstrategy is right now acquiring approximately 129,699 BTC for $3.98 billion at an overall average cost of $30.664 each. The firm is worth $2.6 billion due to its bitcoin trading for $20,100.
Huge difference though. No leverage, they can last a long time, till the next bull market.
— CZ 🔶 Binance (@cz_binance) June 29, 2022
Binance’s CEO Changpeng Zhao has tweeted in response to the previous tweet, “Huge difference. No leverage, they can last a long time, till the next bull market.”
The reason for this tweet from the US-regulated cryptocurrency trading platform Binance can refer to trading using leverage in the crypto market. The bull market can offer both profit and loss for a company owning leverage. But the company has to make an initial deposit which is known as a margin. The company performing leverage trading is bound to be trading on margin since the fund required to maintain a position in the market is a fraction of its total size.
However, since the firm 3AC lost its assets several influencers are catering their own ideas but the firm is right now concentrated to hire legal and financial advisors to look for solutions. At the same time, the firm is also keeping the exit door open with assets sales and rescue packages for other firms to dive in.
