Three Arrows Capital, or 3AC, is facing a liquidity crisis after the collapse of terraUSD, margin calls on its loans and a massive slump in the crypto market.
"The Terra-Luna situation caught us very much off guard," 3AC co-founder Davies told theThree Arrows Capital is still facing a credit crunch exacerbated by the continued pressure on cryptocurrency prices.Meanwhile, the U.S. Federal Reserve has signaled further interest rate hikes in a bid to control rampant inflation, which has taken the steam out of riskier assets.
"The issue is that the value of their [3AC's] assets as well has declined massively with the market, so all in all, not good signs," Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC.
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