According to Colin Wu’s recent tweet, Binance has denied providing a sizable line of credit to troubled hedge fund Three Arrows Capital, claiming that the company has been approached for bailouts by a number of other businesses.
Here is the tweet:
Three Arrows Capital, a $10 billion cryptocurrency hedge firm with headquarters in Singapore, was the most recent casualty of the market meltdown. As the prices of digital currencies fell, they were liquidated by numerous exchanges for failing to fulfil margin calls.
As a result of the failed cryptocurrency effect of the Three Arrows Capital fund, shares of cryptocurrency exchange Voyager Digital also dropped by 51%. Voyager said in a statement that if Three Arrows doesn’t pay back a loan, it can send them a notice of default.Three Arrows’ vendor exposure to Three Arrows covers 15,250 Bitcoin and $ 350 million in the stablecoin USDC, totaling approximately $ 660 million.
Since then, Voyager has acquired credit lines from Alameda Research’s investment section for $200 million in cash, USDC stablecoin, and 15,000 Bitcoin to meet its clients’ liquidity needs.
Using its position as one of the biggest participants in the market with substantial cash reserves, Binance offers various bailout scenarios in a blog post titled “note on bailouts and crypto leverage” on its official website. Binance also emphasises its responsibility to protect users.
Binance stated the following:
“Additionally, in every field, there are more unsuccessful ventures than successful ones. The successes should outweigh the failures, hopefully. However, you get the gist. Bailouts in this situation are absurd. Don’t keep terrible businesses around. Let them struggle. Allow for new, superior projects to replace them, and they will.”
However, Binance claims that while it may not offer bailouts to unsuccessful projects, it may take into account projects that make insignificant errors or those that are fighting to survive or find their footing.
Read more: Three Arrows Capital swaps Staked Ethereum worth $33 million
