Blockchain.com has been a creditor to Three Arrows Capital (3AC) for almost four years now.
The crypto exchange was one of those that sought the liquidation of the hedge fund at a court in the British Virgin Islands. Before the 3AC Chapter 15 bankruptcy in New York, Blockchain.com had been a crucial part of its funding and investment. In all of their four years of engaging in a business partnership, 3AC borrowed more than $2 billion which it had successfully paid back.
Following the insolvency encountered by the distressed hedge fund, several creditors have surfaced to claim they have been the financial backbone behind 3AC.
Over 30 companies were discovered to be the hedge fund’s creditors and are currently owed billions of dollars. Genesis Global Trading, a cryptocurrency prime brokerage firm is one of the biggest creditors. 3AC owes the firm $2.36 billion in under-collateralized loans.
Blockchain.com as a Major 3AC Creditor
According to the 1,157-page legal document which was released on Monday by Teneo Restructuring, details of all of the 3AC loans were discussed. Part of the legal document is an affidavit submitted by Charles McGarraugh, Chief Strategy Officer at Blockchain.com. The affidavit contains details of the financial dealings of Blockchain.com with 3AC for the past four years.
Blockchain.com CEO, Peter Smith had previously said the hedge fund had borrowed and repaid more than $700 million in the whole four years of doing business. Meanwhile, revelation from the affidavit shows that $700 million is the largest single fund pulled by 3AC from the crypto service firm. In total, Three Arrows Capital has borrowed and repaid over $2 billion from Blockchain.com.
The crypto trading firm declared that it had signed a master loan agreement (MLA) with 3AC demanding its funds three years ago. It had also requested the payment of 3AC’s outstanding loan but got no positive response from the hedge fund. Blockchain.com feels that 3Ac is being dubious about its declared net assets value (NAV).
Apart from 3AC, Voyager Digital filed for a Chapter 11 Bankruptcy with the United States Bankruptcy Court of the Southern District of New York. Crypto lending firm, Celsius Network also did the same and declared $167 million in liquidated cash.