Crypto

Blockchain.com Cuts Workforce As 3AC Fallout Continues To Shake Crypto

Illustration of paper people being tossed in the trash.

London-based Blockchain.com is the latest to be affected by crypto hedge fund Three Arrows Capital’s collapse.

CoinDesk reported Thursday the crypto exchange is cutting 25% of its workforce—or about 150 people. The report cited the bear market and the need to absorb financial losses after the company revealed earlier that it stood to lose the $270 million it loaned Three Arrows Capital, also known as 3AC.

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Blockchain.com is not alone in having to face head-on the massive fallout of 3AC after the downturn in digital currencies left the firm unable to meet obligations.

The fallout

3AC, ​​which managed about $10 billion in assets as recently as March, filed for Chapter 15 bankruptcy protection on July 1. Now its co-founders appear to be on the run from creditors.

In the wake of that collapse, crypto lenders Celsius Network and Voyager Digital were forced to file for bankruptcy.

Just yesterday, crypto exchange giant Coinbase said in a blog, that it had no financial exposure to 3AC or either of the crypto lenders—seemingly trying to alleviate investor fears it could be the next company to be affected by the hedge fund’s fall and liquidity issues.

The effects of 3AC’s solvency issues also seem to be attracting the attention of U.S. regulators.

On CNBC Thursday, U.S. Securities and Exchange Commission Chair Gary Gensler said his agency is working to get some crypto lenders registered if they operate more as investment firms.

The announcement comes as lenders who used the now bankrupt crypto platforms seem increasingly unlikely to get their money back.

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Illustration: Dom Guzman

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