Recent Crypto Crash Has Hit These Companies The Hardest
Bitcoin has plunged more than 56% from this years high.
Cryptocurrencies have been hard hit by fears interest rate hikes will end the era of cheap money, with the world's largest digital asset, bitcoin, down more than 56% from this year's high. Several crypto companies have filed for bankruptcy or have been forced to look for emergency capital infusions.
Three Arrows Capital
Singapore-based crypto hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy on July 1.
Once a formidable player in the digital asset space, the downfall of 3AC appeared to stem from the firm's bet on the Terra ecosystem, which was behind failed stablecoin terraUSD. That token lost nearly all of its value in May, shaving almost half a trillion dollars off the crypto market.
High-leveraged, 3AC was unable to meet margin calls from counterparties it had borrowed from. Consequently, crypto lenders BlockFi and Genesis Trading liquidated their positions with the firm. According to court filings, 3AC's creditors claim they are owed more than $2.8 billion.
Celsius Network
New Jersey-based crypto lender Celsius suspended withdrawals on June 12 and a month later filed for Chapter 11 bankruptcy, listing a $1.19 billion deficit on its balance sheet. It had been valued at $3.25 billion in a funding round in October.
Celsius stumbled on complex investments in the wholesale digital asset market. The company had attracted retail investors by promising annual returns as high as 18.6%, but struggled to meet redemptions as crypto prices slumped.
In its first bankruptcy hearing, Celsius lawyers said that its bitcoin mining operations could provide a way for the company to repay customers.
Meanwhile, several state regulators are investigating Celsius' decision to
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