Key Takeaways
- KuCoin is rumored to be dealing with insolvency points within the fallout from Three Arrows Capital’s collapse.
- The agency’s CEO has denied the claims, saying that “every part on KuCoin is working effectively.”
- The event follows a wave of crypto corporations halting buyer withdrawals in response to excessive market circumstances and the Three Arrows disaster.
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The rumors surfaced hours after Voyager Digital introduced it was freezing buyer withdrawals amid the continued Three Arrows Capital disaster.
KuCoin Working as Regular, CEO Insists
Rumors that KuCoin might be on the point of collapse are unfaithful, based on the agency’s CEO.
Pay attention to FUDs!
Unsure who’s spreading these sheer rumors, and what their intentions are, however #KuCoin doesn’t have any publicity to LUNA, 3AC, Babel, and so on.
No “immense endure” from any “coin collapse”, no plan to halt withdrawal, every part on KuCoin is working effectively.
— Johnny_KuCoin (@lyu_johnny) July 2, 2022
Johnny Lyu addressed hypothesis that the agency might be dealing with insolvency in an early Saturday tweet storm, affirming that “every part on KuCoin is working effectively” and the change had no plans to halt withdrawals. Lyu additionally described the circulating chatter about KuCoin’s attainable liquidity points as “sheer rumors” and confirmed that the agency has no publicity to the Terra ecosystem, Three Arrows Capital, or Babel Finance.
Rumors of KuCoin’s inside issues surfaced late Friday, hours after Voyager Digital grew to become the domino to fall as a part of crypto’s ongoing Three Arrows saga. Voyager introduced Friday that it was halting buyer withdrawals, deposits, and buying and selling and “exploring strategic alternate options” for the way the corporate might transfer ahead. Final month, it was revealed that Three Arrows had defaulted on a mortgage of 15,250 Bitcoin and 350 million USDC value round $665 million from Voyager. Three Arrows is but to make the repayments.
KuCoin raised $150 million in a funding spherical in Could, valuing the agency at $10 billion. As Lyu famous in his Saturday announcement, the agency can also be actively hiring regardless of the continued market hunch. Lyu added that “being clear is all the time one in all [KuCoin’s] key rules” and closed his put up with a constructive observe: “Don’t FUD, BUIDL.”
The Three Arrows Disaster
Till the disaster started to unfold in early June, Three Arrows was one in all crypto’s largest hedge funds holding greater than $10 billion in property below administration at its peak. Because the crypto market plummeted, it got here to mild that the agency was dealing with main liquidity points because it had taken on leverage from crypto lenders with out factoring for a major downturn. The agency’s co-founder Kyle Davies mentioned that it had misplaced $200 million on its Terra guess when LUNA crashed in Could, and a number of crypto lenders have since revealed that they’d publicity to the agency. BlockFi loaned Three Arrows an undisclosed sum and has since inked a deal to be acquired by FTX.US for as much as $240 million with a further $400 million rolling credit score facility. Babel Finance, CoinFLEX, and Celsius additionally responded to the market downturn by halting withdrawals, although none of them confirmed that they’d Three Arrows publicity. On Friday, the troubled hedge fund filed for Chapter 15 chapter in New York.
Although the total scale of the Three Arrows disaster stays unknown, a number of corporations have been laborious hit up to now, and the market hasn’t proven a lot signal of life within the fallout. Bitcoin tumbled once more Saturday after per week of rocky worth motion. It’s presently buying and selling at $19,260, about 72.1% down from its $69,000 peak.
Disclosure: On the time of writing, the writer of this piece owned ETH and a number of other different cryptocurrencies.
