Cryptocurrencies, which had surged on June 15 after US Federal Reserve Chair Jerome Powell sounded a firm inflationary stance, gave up their gains yesterday amid renewed market concerns about increasing prices, global turmoil, and a potential recession.
Meanwhile, in an attempt to ease fears about spreading risks from the alleged problems at crypto hedge fund Three Arrows Capital, crypto payment system BlockFi says it is continuing normal operations and no customer funds have been harmed.
BlockFi stated on Twitter that a prominent customer recently failed to satisfy its commitments on an over-collateralized margin loan and that it “completely escalated the loan and fully disposed of or hedged all the related assets.”.
BlockFi Liquidates Three Arrow Investment
The Financial Times recently disclosed that BlockFi was one of the entities that liquidated some of Three Arrows’ investments when the crypto hedge fund failed to fulfill margin calls.
The crypto sector has been shocked by the collapse of key lending platform Celsius Network, which has blocked withdrawals since Sunday. Celsius Network blocked the service after Three Arrows’ faced the trouble. Market players are anxious that additional businesses may be harmed as a result of collateral damage.
Deribit, the holding company of which Three Arrows is a stakeholder, declared on Twitter on Thursday (June 16), it is still “economically strong” though it has a debt that it still believes is “possibly unstable.”
Three Arrows, located in Singapore, is one of the world’s largest participants in the crypto sector, with investments and tokens in a diverse variety of crypto ventures.
On June 14th, co-founder Zhu Su took to Twitter saying the firm is dedicated to “working this out,” but did not elaborate. Three Arrows initially did not reply for any comment.