Blockchain.com CEO: Crypto credit market will not recover anytime soon after Three Arrows Capital incident

Odaily Planet Daily News Blockchain.com co-founder and CEO Peter Smith believes that the crypto credit market will not recover in the short term. Blockchain.com was the fund’s primary lender before Three Arrows Capital went bankrupt more than a year ago. At the time, Smith said in a letter to shareholders that the company faced a $270 million loss on loans to Sanjian. Speaking at the Token2049 conference in Singapore last week, Smith spoke about the impact of Sanjian’s bankruptcy, saying the event led to a “massive contraction in credit markets.” Smith said: “I don’t think the credit market will recover in the same way. Applying TradFi’s model to cryptocurrencies will not work. You will see that credit is still over-collateralized, which is the current status of most credit transactions. The crypto industry is going to need to find a way to fund liquidity and leverage in a more risk-controlled way, and I don’t think the industry has quite figured that out yet.” (The Block)