Embattled crypto hedge fund Three Arrows Capital faces allegations of using customer funds to meet margin calls on its positions.
Danny Yuan, the head of crypto trading firm 8Blocks Capital, alleged that Three Arrows had used about $1 million of 8Blocks’ funds to answer its margin call. 8Blocks had entered into an agreement with the hedge fund in 2020 to use the latter’s trading accounts.
The allegations come as Three Arrow faces liquidations on multiple fronts by its debtors, amid a sharp decline in the crypto market.
The firm has reportedly already seen some of its positions closed, which has also to some extent caused a decline in the crypto market, especially Ethereum prices.
Three Arrows allegedly ghosted customers, debtors
8Blocks’ Yuan alleged in a Twitter thread that the firm had initially requested Three Arrows for a withdrawal of its funds earlier this week, which was ignored.
