Factbox: The crypto crash hit these companies the hardest

Representations of the Ripple, Bitcoin, Etherum and Litecoin digital currencies are seen on a PC motherboard on this illustration image, February 14, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

July 28 (Reuters) – Cryptocurrencies have been exhausting hit by fears rate of interest hikes will finish the period of low-cost cash, with the world’s largest digital asset, bitcoin, down greater than 56% from this 12 months’s excessive. Several crypto companies have filed for chapter or have been compelled to search for emergency capital infusions.

THREE ARROWS CAPITAL

Singapore-based crypto hedge fund Three Arrows Capital (3AC) filed for Chapter 15 chapter on July 1. learn extra

Once a formidable participant in the digital asset area, the downfall of 3AC appeared to stem from the agency’s wager on the Terra ecosystem, which was behind failed stablecoin terraUSD. That token misplaced almost all of its worth in May, shaving nearly half a trillion {dollars} off the crypto market. learn extra

High-leveraged, 3AC was unable to fulfill margin calls from counterparties it had borrowed from. Consequently, crypto lenders BlockFi and Genesis Trading liquidated their positions with the agency. According to courtroom filings, 3AC’s collectors declare they’re owed greater than $2.8 billion. learn extra

CELSIUS NETWORK

New Jersey-based crypto lender Celsius suspended withdrawals on June 12 and a month later filed for Chapter 11 chapter, itemizing a $1.19 billion deficit on its stability sheet. It had been valued at $3.25 billion in a funding spherical in October. learn extra

Celsius discovered complicated investments in the wholesale digital asset market. The firm had attracted retail buyers by promising annual returns as excessive as 18.6%, however struggled to fulfill redemptions as crypto costs slumped. learn extra

In its first chapter listening to, Celsius attorneys mentioned that its bitcoin mining operations may present a manner for the firm to repay clients. learn extra

Meanwhile, a number of state regulators are investigating Celsius’ resolution to droop buyer withdrawals, Reuters reported. learn extra

VOYAGER

Crypto lender Voyager Digital (VYGVQ.PK), additionally based mostly in New Jersey, had been a rising crypto star, reaching a $3.74 billion market cap final 12 months. But the collapse of 3AC dealt a serious blow to Voyager, which was closely uncovered to the hedge fund. Voyager has filed claims of greater than $650 million towards 3AC.

Voyager filed for Chapter 11 chapter on July 6, reporting that it had $110 million value of money and crypto property available. Since then, the U.S. Federal Deposit Insurance Corp has confirmed that it’s probing Voyager’s advertising and marketing of deposit accounts for cryptocurrency purchases, which the firm had marketed as being FDIC-insured. learn extra

Crypto trade FTX and Alameda Research, each based by billionaire Sam Bankman-Fried, provided to buy all of Voyager’s digital property and loans, besides its loans to 3AC, and allow Voyager clients to withdraw their property from an FTX account. However, Voyager rebuffed that provide in a courtroom submitting as a “low-ball bid.” learn extra

VAULD

Singapore-based crypto lender Vauld on July 8 filed with a Singapore court for protection against its creditors, after suspending withdrawals days earlier. The company owes $402 million to its creditors, according to a report from The Block.

Vauld is backed by billionaire investor Peter Thiel’s Valar Ventures, Pantera Capital and Coinbase Ventures.

In a July 11 blog post, Vauld said it is discussing a possible sale to London-based crypto lender Nexo while at the same time exploring potential restructuring options. read more

BLOCKFI

Facing an increase in withdrawals and a hit from 3AC, crypto lender BlockFi signed a deal July 1 with FTX that provides BlockFi with a $400 million revolving credit facility, and includes an option that enables FTX to buy the company for up to $240 million. read more

BlockFi was hard hit by the crypto crash, and implemented multiple cost-cutting measures in June, including slashing its headcount by 20% and cutting executive compensation. The company was valued at $3 billion in a funding round last year.

Reporting by Hannah Lang in Washington; Editing by Michelle Price and Lisa Shumaker

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