Blockchain.com, a crypto wallet provider and exchange, could lose $270 million it has previously loaned to hedge fund Three Arrows Capital, CoinDesk has reported.
According to a letter sent by the company to its shareholders:
"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."
Blockchain.com CEO Peter Smith has said that over the past four years, Three Arrows Capital has borrowed and repaid more than $700 million in cryptocurrency loans.
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He has also stressed that the platform "remains liquid, solvent" and the current situation "will not affect users."
A source familiar with Blockchain.com's financial situation has said the company has sufficient resources to cope with the losses.
Three Arrows Capital (3AC) is experiencing serious problems and has ended up filing for bankruptcy due to the fall of the crypto market and the collapse of the Terra ecosystem.