BlockFi seeks to quell fear amid fallout from crypto hedge fund Three Arrows
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BlockFi confirmed it recently had a large client that failed to meet its obligations on an over-collateralised margin loan.
PHOTO: NYTIMES
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NEW YORK (BLOOMBERG) - Crypto lending platform BlockFi said it continues normal operations and no client funds are impacted, in an apparent move to allay concerns over contagion risks from the suspected troubles at crypto hedge fund Three Arrows Capital.
BlockFi confirmed it recently had a large client that failed to meet its obligations on an over-collateralised margin loan, and it "fully accelerated the loan and fully liquidated or hedged all the associated collateral", chief executive Zac Prince said on Twitter, without naming the client.
Earlier, the Financial Times reported that BlockFi was among companies that liquidated at least some of Three Arrows' positions as the crypto hedge fund fails to meet margin calls.
The crypto industry has been shaken by the fall from grace of major lending platform Celsius Network, which has frozen withdrawals since Sunday, followed by the apparent troubles at Three Arrows. Market participants are concerned that more companies will suffer from collateral damage.
Crypto derivatives exchange Deribit, whose parent company counts Three Arrows as a shareholder, said on Twitter on Thursday (June 16) that it remains "financially healthy", despite having a net debt that it now considers "potentially distressed".
Singapore-based Three Arrows is among the world's biggest players in the crypto industry, holding investments and tokens in a wide range of crypto projects.
On Tuesday, its co-founder Zhu Su tweeted that the company is committed to "working this out", without providing further details. Three Arrows did not immediately respond to a request for comment by Bloomberg.
