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Singapore-based hedge fund Three Arrows Capital is making the crypto market crash to deepen further. The firm is liquidating its holdings to repay the debt to prevent its liquidation.
A wallet allegedly linked to Three Arrows Capital has liquidated more than 15k ETH on Compound in just 1 hour.
Besides this wallet, Three Arrows Capital has been liquidating holdings in its other wallets too as the Ethereum (ETH) prices continues to plummet, putting liquidation pressure on the firm.
Three Arrows Capital on the Verge of Liquidation
After DeFi lending protocol Celsius, Three Arrows Capital now faces insolvency risks as financial conditions continues to deteriorate due to extreme crypto market conditions.
PeckShieldAlert in a series of tweets on June 15 revealed that Three Arrows Capital has liquidated nearly 15k ETH in 5 transactions within just 1 hour. The wallet is close to a $35 million liquidation on Compound, having levered ETH position with a 1.04 health factor.
The address uses USDT and USDC to repay the debt and withdraws ETH. Thereafter, Three Arrows Capital converts ETH to USDT or USDC on Uniswap V3 and repays the debt on Compound.
Moreover, Three Arrows Capital has been paying off its debt on AAVE V2 to avoid liquidation of its 223k ETH worth nearly $264 million. The ETH in the wallet faces liquidation risk if ETH price falls to $1016. This would increase liquidation risks. Also, it will cause massive selloff in Ethereum, which is already seen in the past few hours.
Furthermore, Three Arrows Capital is liquidating its stETH holdings to ETH amid liquidation risks. The top firms have already liquidated their positions in Three Arrows Capital. Meanwhile, several crypto firms are now revealing their explore sure to Three Arrows Capital.
Three Arrows Capital Loses Shine Amid ETH Crash
Three Arrows Capital has rumored to be facing insolvency as it faces liquidation risks. Meanwhile, the firm’s co-founder Zhu Su has revealed that they are working on the situation, while communicating with associated parties.
However, the Ethereum (ETH) price could possibly dive below the $1000 level after the Federal Reserve’s FOMC meeting today. The Fed will be possibly raising interest rates due to sticky inflation and stagflation.
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