Eight Blocks Capital, a cryptocurrency trading platform, has accused Three Arrows Capital of diverting $1 million in money to compensate lenders and counterparties after the latter reportedly went bankrupt for more than $400 million.
Three Arrows Capital, a crypto hedge fund established in Singapore, may be facing insolvency. Since being liquidated, it is said to have kept little touch with its counterparties.
According to 8 Blocks Capital CEO Danny Yuan in a series of tweets earlier today, Three Arrows Capital, better known as 3AC, did not adhere to the agreement with 8 Blocks Capital, which says that the latter can withdraw cash at any moment at its discretion. He further stated that 3AC was not permitted to shift cash belonging to 8 Blocks Capital without first obtaining clearance.
Yuan stated on June 12, 2021, that 8 Blocks Capital requested a withdrawal due to the market’s decline, which 3AC granted. When the market continued to fall the next day, 8 Blocks Capital’s request for a bigger withdrawal was denied.
On June 15, the Hong Kong-based company discovered that around US$1 million had vanished from its 3AC accounts.
Eight Blocks Capital has yet to get a response from Three Arrows Capital on the funds that have gone missing.
“This was a mutually beneficial relationship for over 1.5 years. We had known [3AC] since 2018, though they were competent, and didn’t think they were degen enough to lose billions and not employ basic risk management,” Yuan said.
8 Blocks Capital, on the other hand, is “fine,” according to the CEO, and has devised a strategy to recoup the funds.