Blockchain.com is one of the cryptocurrency companies likely to lose millions of dollars as a result of the collapse of crypto hedge fund Three Arrows Capital.
A report by CoinDesk states that the crypto exchange, among the oldest in the industry, could see $270 million flushed down the drain due to 3AC’s liquidation.
Crypto firms collapse amid massive contagion
Three Arrows Capital is one of several crypto firms caught in the throes of a massive contagion, catalyzed by blatant financial irresponsibility. Terra’s collapse in May appears to have been just the tip of the iceberg.
With liquidations and bankruptcy filings all over, the market is likely yet to see the full impact of what has happened at companies such as Celsius Network, Voyager Digital, BlockFi and Vauld.Some more will have probably have bitten the dust by the time the tide fully recedes.
As for Blockchain.com, CoinDesk cites a shareholder letter the company published on Friday noting 3AC’s insolvency risks putting a $270 million hole in the exchange’s balance sheet. According to the report, these are the sentiments of Blockchain.com CEO Peter Smith.
Earlier in June, Smith commented on the “historic wash out” in crypto, noting that the space was likely to see continued crushing of “high risk capital.”
1/ Question of the week: what is happening in crypto markets right now? Answer: A historic wash out of leverage and risk capital across the space.
— Peter Smith (@OneMorePeter) June 24, 2022
On Thursday, Galaxy Digital CEO Mike Novogratz said the events in the crypto industry, specifically around the collapsing companies, could be subject to investigation and prosecution.