Lack of transparency has been a big issue for crypto lenders especially since the current fear of insolvency. Every news cycle reports rumors and loaded theories to do with Celsius and Three Arrows Capital. There are few facts that can be verified by reporters. Several well-known personalities in the crypto industry have offered their take on this issue.
So, is the fallout going to be as terrible as the predictions? Ryan Selkis of Messari, a market intelligence firm explored available information and other items which he gathered. Selkis thinks that the Celsuis and 3AC crisis is not as bad as it is made out to be. 3AC has $1.5 billion in liabilities on the books and it is carrying on with its work as usual. He thinks that the crisis is overhyped.
Many platforms, projects and funds have distanced themselves from both companies this week and fast. Some have also confirmed third party liquidations in positions for 3AC. Genesis and BlockFi have tweeted that they too liquidated sizeable third-party holdings in the last week. The point is that neither have named Three Arrows and these liquidations could have to do with another struggling crypto firm.
Per available information on 3AC’s website, BlockFi is still listed as an investor/partner but Genesis is not mentioned. According to Selkis, if 3AC’s liabilities are limited to $1.5 billion as mentioned, the effects on the market are not as terrible. This debt is just 1% of the crypto industry’s total market cap and way less than the value of BTC which was dumped by Terraform.
