Crypto-focused hedge fund and enterprise capital agency Three Arrows Capital is contemplating the sale of remaining belongings and even a bailout because it grapples with the prospect of insolvency within the wake of a violent collapse in digital asset markets.

The agency, which additionally goes by 3AC, has employed authorized and monetary advisers to discover options for its buyers and lenders, The Wall Road Journal reported Friday. A number of choices are on the desk, together with asset gross sales and a rescue package deal by one other agency, co-founder Kyle Davies advised the Journal. Within the meantime, 3AC is trying to purchase extra time by negotiating a tentative settlement with current collectors.

Davies, who stated he nonetheless believes in the way forward for crypto, disclosed the extent of 3AC’s participation in a $1 billion token sale issued by Luna Basis Guard (LFG), a nonprofit group set as much as defend the Terra ecosystem’s stablecoin peg, in February of this 12 months. Davies stated that 3AC purchased roughly $200 million in LUNC (beforehand LUNA) tokens in the course of the sale, which additionally had participation from enterprise corporations DeFiance Capital, Republic Capital, GSR and Tribe Capital, amongst others.

Earlier this week, a whistleblower from the Terra Neighborhood Discussion board revealed that 3AC had bought a complete of 10.9 million locked LUNC price almost $560 million. That place is now price lower than $1,000.

Three Arrows Capital purchased 10.9M locked LUNA for $559.6m – it is now price $670.45.

Ouch

— Crypto Maxi (@cryptoMaxi420) June 14, 2022

Along with being uncovered to the Terra ecosystem collapse, 3AC incurred huge liquidations throughout a number of positions this week after the value of Bitcoin (BTC) and Ether (ETH) plunged to their lowest ranges since December 2020.

Su Zhu’s cryptic assertion as rumors swirl of 3AC liquidations and insolvency

As Cointelegraph reported on Thursday, Three Arrows Capital failed to fulfill margin calls from a bunch of lenders that included BlockFi. These corporations liquidated at the very least a few of 3AC’s positions.