(Reuters) – Cryptocurrency hedge fund Three Arrows Capital Ltd is exploring options, including the sale of assets and a bailout by another firm, the Wall Street Journal reported on Friday.
The crypto market has suffered heavy losses, with companies such as Coinbase, Gemini, Blockfi and Crypto.com laying off thousands of employees, as investors sell risky assets in a rising interest rate environment.
The ten-year old hedge fund, founded by Su Zhu and Kyle Davies, has hired legal and financial advisers to help it work out a solution for its investors and lenders, according to the report, which cited the company’s founders.
“The Terra-Luna situation caught us very much off guard,” Davies said, according to Wall Street Journal, adding that Three Arrows invested about $200 million in Luna.
Cryptocurrency markets were rocked last month by the spectacular collapse of terraUSD and its sister token luna after the stablecoin lost its peg to the dollar.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Amy Caren Daniel)
