Three Arrows Capital’s co-founders Kyle Davies and Zhu Su in an interview on Friday said the firm is considering asset sales and bailout as the insolvency risk looms. Davies says, after suffering heavy losses from a market-wide selloff in digital assets, the company has hired legal and financial advisers to work on a final solution.
Kyle Davies asserts the TerraUSD stablecoin and LUNA collapse in May has impacted the assets under management of the firm. In April, the company had $3 billion in assets under management. However, he still believes in cryptocurrencies.
Currently, the company hopes to reach an agreement with lenders to get more time to work on a solution. The firm is operating normally as it seeks a solution.
Three Arrows Capital Is Finding a Solution, Says Kyle Davies
Three Arrows Capital is facing insolvency risks as top companies continue to liquidate their positions in the crypto hedge fund. Hence, Three Arrows is exploring options including asset sales and financial assistance from another firm, Davies told the Wall Street Journal on June 17.
The hedge fund lost a total of $60 billion in market capitalization due to the Terra collapse. The firm was able to withstand the loss, but the fall in prices of Bitcoin, Ethereum, and other cryptocurrencies led to more financial troubles.
