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DeFiance, Avalanche, dYdX Distance Themselves From Three Arrows Capital Drama
The firms said operations will continue as usual as the crypto community assesses the fallout from speculation the crypto hedge fund failed to meet margin calls.
Updated May 9, 2023, 3:48 a.m. Published Jun 17, 2022, 11:47 a.m.
Crypto fund DeFiance Capital, layer 1 blockchain project Avalanche and Ethereum-based trading tool dYdX addressed community concerns Friday as investors assessed possible damage related to speculation that prominent crypto fund Three Arrows Capital (3AC) faces financial difficulties.
- The three moved to distance themselves from 3AC, which may be facing possible insolvency after incurring at least $400 million in liquidations earlier this week amid a tumbling market and troubles at crypto lender Celsius.
- “[D]YdX is not exposed to 3AC contagion in any way,” developers said in a tweet in early Asian hours.
- DeFiance Capital founder Arthur Cheong said in a tweet the firm was “not done” and was “actively working to resolve the situation.” Cheong’s tweet came hours after Messari founder Ryan Selkis said 3AC faced liabilities of over $1 billion and that funds like DeFiance “may be done.”
- “DeFiance always operates independently,” Cheong wrote in a Telegram message to CoinDesk.
- Avalanche, a 3AC portfolio project, said its treasury funds were not custodied or managed by 3AC. “Due to recent speculation, we’d like to clarify that 3AC has never in any way managed, used, or custodied any Avalanche Foundation treasury funds,” the project tweeted.
Due to recent speculation, we’d like to clarify that 3AC has never in any way managed, used, or custodied any Avalanche Foundation treasury funds.
— Avalanche 🔺 (@avax) June 16, 2022
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- At its peak, Dubai-based 3AC managed billions of dollars and its founders, Su Zhu and Kyle Davies, were two of the most vocal crypto market participants in the past few years.
- While 3AC hasn’t commented on the speculation, Zhu said the team is in contact with relevant parties. “We are in the process of communicating with relevant parties and fully committed to working this out,” Zhu tweeted.
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