Well, it’s official. Three Arrows Capital, also known as 3AC, has filed for Chapter 15 bankruptcy in New York late Friday afternoon. The lame stream news picked up on this quickly as it is one of just another cryptocurrency firms that has gone belly up in the last couple of months and they can’t wait to break the news to show that our industry is a scam.
On the flip side of that notion, it is to note that these dominos falling, all starting with the Terra Luna and UST meltdown, then shortly after came the halting of withdrawals from Celsius, and then the 3AC liquidations, has not left a good taste in the mouths of investors or government regulators. But I digress, let’s get back to the bankruptcy filing…
Overleveraged
Leverage can be a double edged sword. One one side, you can utilize leverage in a well planned, and responsible manner to help create more wealth, which was the idea of the crypto hedge fund, but the problem is that 3AC was NOT responsible with their leverage. They were seriously in the deep end of the pool and when the markets took a nose dive, the margin calls started to pile in.
According to this article by CoinDesk, 3AC has been ordered to liquidate all assets in the British Virgin Islands, and this move to file Chapter 15 bankruptcy in the US will help protect any remaining assets from the liquidation order. This theory is backed up in this article from Bloomberg.
According to the Bloomberg article, the papers were filed by representatives of the crypto hedge fund late Friday afternoon in a New York City court.
Another Scar On The Face Of The Crypto Industry
This incident with Three Arrows Capital is just another scar of the already battle tested face of the crypto industry. Investors have been bruised and some have left all together, calling the entire industry a scam. What people need to realize is that these events have nothing to do with the actual technology or fundamentals of what cryptocurrency and blockchain are all about.
When looked at it from a bird’s eye view, all three of these major incidents (Terra, Celsius, and 3AC), they are all centralized, venture capitalist funded projects, and in the case of 3AC, a so called ‘hedge fund’. This is what the industry needs to shine a light on is these centralized, predatory projects, that are misusing customer funds.
The governments and lame stream media are chomping at the bit for any FUD they can throw at the industry because they are scared, knowing that we have a solution to the problems they have created.
Investors need to also recognize that their money is NOT safe in the hands of any counter party and that is the reason Bitcoin was created in the first place. The problem is that people are too lazy to take control and responsibility over their own money. So they are giving their money to these firms which are lending it out multiple times over and then cannot handle market volatility. How is this any better than the system we are trying to change? It’s not. PERIOD.
So this should be just another friendly reminder, NOT YOUR KEYS NOT YOUR COINS!!!
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Article originally posted on our website, and supposed to be linked through @exxp, but it failed to post.
https://coin-logic.com/three-arrows-capital-files-for-bankruptcy/