Three Arrows Capital positions liquidated on BitMEX, FTX and Deribit

Cryptocurrency platforms BitMEX, FTX and Deribit liquidated the hedge fund Three Arrows Capital’s (3AC) positions due to its failure to meet margin requirements. The Block reports, citing informed sources.

Sources told the publication that 3AC owed BitMEX around $6 million. A representative of the crypto-derivatives exchange confirmed the forced closure of the position.

“It was a secured loan, in which client funds were not involved,” the company said.

Deribit chief John Jansen declined to comment, but confirmed that since 2020 3AC has been a shareholder in the platform’s parent company. He said the exchange has “a small number of accounts” that are regarded as “potentially problematic”.

“Even if none of these debts are repaid, we will remain financially resilient. This will in no way affect our operations,” said Jansen.

The publication also reached out to cryptocurrency exchange Bitfinex, where 3AC conducted trading operations. A company representative said that the hedge fund closed its positions on its own, incurring losses.

Meanwhile, journalist Colin Wu, citing sources, reported that Asian institutional investors “liquidated hundreds of millions of dollars in 3AC”.

Earlier, journalists from the Financial Times reported about the forced closure of at least part of 3AC’s positions by the crypto-lending platform BlockFi. BlockFi chief Zak Prince indirectly confirmed the information, saying the company had liquidated a debt tied to a “major client”.

Against the backdrop of the market slump, rumours of the hedge fund’s insolvency spread online, as it actively used protocols such as Aave.

On June 16, the trading firm 8 Blocks Capital accused Three Arrows Capital of using client funds to cover margin calls.

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