Venture firm Three Arrows Capital (3AC) reportedly failed to honor margin calls from its lenders, raising the specter of insolvency after this week’s crypto market crash triggered unforeseen liquidations for the firm with headquarters in Singapore.

Crypto lender BlockFi was among the firms that liquidated at least some of 3AC’s positions, according to the Financial Times. Citing people familiar with the matter, the FT reported that 3AC had borrowed Bitcoin (BTC) from the lender but was unable to meet a margin call after the market soured earlier this week.

The 3AC-related issues appear to have affected Finblox, a Hong Kong-based platform that allows investors to earn returns on their digital assets. Finblox said it was forced to lower its withdrawal limits on Thursday due to concerns surrounding the venture firm.

While estimates vary, 3AC likely incurred $400 million in liquidations across multiple positions. The company had significant exposure to Terra (originally Luna, now LUNC) and also held significant positions in projects such as Solana (SOL) and Avalanche (AVAX). As Cointelegraph reported, 3AC has spent the past few days moving assets to top up funds on various decentralized finance (DeFi) platforms, most notably Aave (AAVE).

However, this week’s massive sell-offs were likely triggered by the collapse of Ether (ETH), which plunged to $1,000 en route to its lowest level since December 2020. There was also speculation that 3AC’s exposure to synthetic assets , such as Grayscale Bitcoin Trust. (GBTC) and Lido’s Staked ETH (stETH), was also responsible for the massive sell-off events.

Rumors of 3AC’s insolvency have surfaced in recent days after Su Zhu, the company’s outspoken co-founder, issued a cryptic tweet that the company was working with “relevant parties” to resolve its issues.

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