According to today’s Wall Street Journal article, cryptocurrency hedging firm Three Arrows Capital (3AC) is focusing on negotiating a bailout deal.

The failure of Terra, one of the biggest blockchain projects, which completely collapsed in early May, had a significant impact on the cryptocurrency industry.

Three Arrows Capital Kyle Davis talks about the firm’s financial woes, the hedge fund’s $200 million holdings in the Luna token disappeared as values ​​of the government token and its sister stablecoin TerraUSD plummeted to almost zero.

While 3AC survived the previous Tether outbreak, the company eventually went bankrupt due to plummeting bitcoin values. Bitcoin price fell to $20,000 earlier this week, its biggest drop since December 2020.

According to Davis, the hedge fund is currently evaluating some of its risky investments. Davies co-founded 3AC in 2012 with his classmate Zhu Su. With 3AC controlling billions of dollars, the duo became one of the largest cryptocurrency owners in the world.

Suspicions about 3AC’s problems began to circulate in June. Zhu then seemed to confirm them with a confusing tweet about how to deal with “involved parties.” To this day, the hedge firm has remained silent on its issues, refusing calls for comment.

The Financial Times reported on June 16 that 3AC did not follow up with the lender’s margin calls. BlockFi, a well-known cryptocurrency lender, acknowledged that some of the hedge fund’s holdings had been liquidated.

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