According to exclusive court filings from Trustee Teneo, crypto hedge fund, Three Arrows Capital (3AC) is in deep waters with its debts worth $3.5 billion to nearly 30 companies. The legal document unveiled manifold loans taken by 3AC, one of which included a $75 million loan from the other elephant in the room, the crypto lending platform, Celsius.
Court filings revealed that 3AC obtained two loans from Celsius in the stablecoin USDC worth $50 million and $25 million. Following this, now it becomes evident that the 3AC, Celsius, and Terra-Luna crashes were all linked as part of a domino effect. 3AC collapsed as with the Terra-Luna fiasco, which further led to a drastic drop in positive market sentiment, further causing a phenomenal rise in withdrawals from Celsius’ platform, which in turn forced the platform to suspend withdrawals, and the rest is modern history.
According to the same court filing, Genesis Asia Pacific Ltd. is 3AC’s biggest lender after loaning $2.36 billion to the hedge fund. Furthermore, 3AC loans were partially collateralized including — 17,443,644 Grayscale Bitcoin Trust shares; 2,739,043.83 AVAX tokens; 13,583,265 NEAR tokens; and 446,928 Grayscale Ethereum Trust shares. While Genesis tried to recover the same, the debt was never cleared since 3AC filed for Chapter 15 bankruptcy on July 1.
After 3AC, Celsius Files For Bankruptcy
Following 3AC’s footsteps, Celsius also joined the list of crypto businesses that filed for bankruptcy. Subsequent to the bankruptcy filing, Celsius unveiled that it owed its users $4.7 billion, which the platform is presently incapable of reimbursing.
According to the recent analysis by the on-chain and social metrics firm, Santiment — Celsius token’s price dropped as predicted, followed by the network’s profit loss ratio picturing only losses over the last few months. Nevertheless, the whale movement for Celsius witnessed minimal movement, displaying a lack of liquidation.
Watcherguru’s report on the same dissected these metrics noting — “a negative reading indicates that more holders will incur losses if they sold the cryptocurrency at the prevailing price”. This means that the Whales are not heavily offloading in an attempt to caveat incurring a hefty loss.