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Cryptocurrency Fund’s Bankruptcy Reveals Doubts in Lending Chain

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According to reports, court documents submitted on Tuesday showed that just a few weeks before filing for bankruptcy, the crypto hedge fund Sanjian Capital (3A…

Cryptocurrency Fund’s Bankruptcy Reveals Doubts in Lending Chain

According to reports, court documents submitted on Tuesday showed that just a few weeks before filing for bankruptcy, the crypto hedge fund Sanjian Capital (3AC) sent a one-page statement of net asset value (NAV) to the lending agency Voyager Digital. Voyager said that it had lent $654 million to 3AC, accounting for nearly 58% of its loan portfolio. During this period, both parties only conducted one due diligence.

During the period of Voyager’s loan of US $654 million to 3AC, both parties only conducted one due diligence

Interpretation of the news:


Sanjian Capital (3AC) was a cryptocurrency hedge fund that declared bankruptcy recently. Subsequent to this event, court documents have disclosed that just a few weeks before the bankruptcy announcement, 3AC submitted a one-page statement of net asset value (NAV) to Voyager Digital – a lending agency that provided $654 million, which accounted for almost 58% of its loan portfolio. During this period, only one due diligence was conducted between the two parties.

The above revelation raises many questions and doubts about the lending chain, particularly with regard to how cryptocurrencies and their underlying assets are valued, traded and priced accurately. The 3AC case highlights that the cryptocurrency market remains opaque, and investors must therefore be vigilant in managing risks.

The events leading up to the 3AC bankruptcy also express that cryptocurrency remains a highly volatile and risky market. The high level of risk mainly arises from the volatile prices of cryptocurrencies, which can fluctuate significantly within hours. This level of risk does not only present a challenge for investors and traders but also raises many regulatory and compliance concerns.

Moreover, this case highlights the importance of proper due diligence when it comes to investing in hedge funds or conducting any other business in the blockchain industry. The lack of due diligence before lending a significant sum of money to 3AC may have contributed to Voyager’s financial losses.

In conclusion, the 3AC bankruptcy and the subsequent events depicting lending relationships that are prone to fraud, as seen in this case, makes it clear that regulating cryptocurrency is non-negotiable. It is important to establish regulatory frameworks that will keep investors and borrowers safe while advancing innovation in the industry.

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