Crypto exchanges FTX, Deribit and BitMEX have liquidated their positions in the venture firm Three Arrows Capital (3AC) after the firm failed to meet margin calls.
A few days ago, reports started circulating that $400 million had been liquidated from the venture firm by its lenders and that the firm was facing liquidity issues.
The firm owes BitMEX about $6 million. A spokesperson for BitMEX confirmed that the exchange had liquidated its positions in the firm and said, “This was collateralised debt and did not involve any client funds.”
“We are not going to be like other brands and wax poetic about our limited exposure and strong capital position — instead, we will demonstrate it by providing our users a reliable and liquid trading venue every day, no matter the situation.”
BitMEX’s legal department is in touch with 3AC to decide what to do further.
Deribit describes its losses as minimum. The exchange platform tweeted, “We can confirm that Three Arrows Capital is a shareholder of our parent company since February 2020.”
“Due to market developments, Deribit has a small number of accounts that have a net debt to us that we consider as potentially distressed. Even in the event that none of this debt is repaid to us, we will remain financially healthy and operations will not be impacted.”
The platform confirmed that all user funds were safe and any potential losses would be covered by Deribit.
FTX on the other hand has also suffered a “tiny” impact and the exchange has refused to comment further “unless required by law”.
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Lastly, 3AC closed its positions on exchange platform Bitfinex at a loss without having to be liquidated. 3AC withdrew all its funds from the platform and Bitfinex did not incur any losses.