Bankrupt hedge fund Three Arrows Capital on Tuesday removed nearly 20,945 stETH worth nearly $33.76 million from Curve ETH liquidity pool. Three Arrows have also withdrawn 203 WBTC, 4,051,368 USDT, and 2462 WETH from Curve.
Three Arrows Capital Withdraws Staked Ether (stETH) Again
According to Etherscan data, an address marked as “Three Arrows Capital” by Nansen has removed staked ETH (stETH) worth nearly $33.76 million from the Curve liquidity pool on September 6. The address currently holds 9,405 ETH, 20,948 stETH, and other tokens, worth a total of $57 million.
The hedge fund also removed 203 WBTC worth $4.04 million, 4,051,368 USDT worth $4.05 million, and 2,462 WETH worth $4.08 million. Thus, Three Arrows Capital (3AC) has withdrawn nearly $45 million from the Curve liquidity pool. Also, the wallet transactions data reveals nearly $9 million wrapped staked ETH was unwrapped on August 26.
As per a Dune dashboard, 29,435 CRV worth $34k and 31,276 LDO worth $69k were also swapped on Cow Swap. The hedge fund is most likely to convert the holdings into Ethereum (ETH) and transfer funds to other wallets. Moreover, Three Arrows still have stETH worth over $31 million in its wallets. The total value of the portfolio is $86.80 million.
Last week, Three Arrows Capital moved nearly 10k Ethereum (ETH) and over 1.5 million USDT from one of its wallets. The address transferred over 1.6 million USDT to OKX, Huobi, and Binance wallets.
Wallets belonging to Three Arrows Capital have become active months after filing bankruptcy filing in July. Moreover, the amounts in the transactions have now jumped to over $10 million.
Another Liquidity Crisis Due to stETH Withdrawal
The last liquidity crisis in June triggered a contagion effect that caused insolvency and bankruptcy of crypto companies. These include Three Arrows Capital, Celsius Network, Babel Finance, Voyager, etc.
The liquidity crisis was sparked by the withdrawal of staked ETH (stETH) from liquidity pools. As a result, the stETH deviated from a 1:1 peg to Ethereum (ETH). In fact, the peg between stETH and ETH was never restored due to the crypto market crash and other macroeconomic factors.
Moreover, the stETH is crucial for the PoS Ethereum. A further deviation could have severe consequences for Merge and Ethereum.
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