8 Blocks Capital calls on multiple platforms to freeze the funds of Three Arrows Capital in order to recover assets through litigation

As rumors of Three Arrows Capital's (3AC) insolvency continued, Danny Yuan, chief executive of trading firm 8 Blocks Capital, called on platforms holding 3AC funds to freeze the assets.

Danny Yuan explained their firm’s partnership with Three Arrows on Twitter, noting that they paid the firm to use a trading account they owned. The protocol includes the ability to withdraw funds at any given time. He explained:

“We’ve known them since 2018 and thought they were capable, wouldn’t degenerate to the point of losing billions of dollars, wouldn’t fail to employ basic risk management.”

Yuan said the problem didn’t arise until June 13, when 8 Blocks Capital requested a large-scale withdrawal due to market conditions — when Three Arrows Capital did not respond to his request. "After a while, the market stabilized and we didn't need the capital anymore. We thought maybe they were just too busy."

However, things went sour when 8 Blocks Capital discovered through a script that they had $1 million short in their Three Arrows account. Yuan said they reached out to Three Arrows co-founder Kyle Davies and their team to inquire about the missing funds. However, they got no response.

As rumors of Three Arrows' insolvency circulated online, Yuan noted that they released what they knew to assess the severity of the situation. After that, Yuan said, they were contacted by people who, like themselves, had worked with Three Arrows. Yuan said that through this investigation, they learned more about the situation of 3AC.

Danny Yuan revealed on twitter that Three Arrows Capital carried out leveraged transactions everywhere and was issued a margin call, but Three Arrows Capital did not respond to the margin call, but made every platform in trouble, and the platform had no The choice, the only choice is to liquidate, leading to further sell-offs in the market.

Yuan also emphasized that Three Arrows Capital still holds many assets on various platforms, but he did not disclose the names of these assets. Therefore, Yuan publicly asked these platforms to freeze the funds of Sanjian Capital so that Sanjian Capital could be forced to repay the debt through legal procedures in the future.