Recent court documents show that beleaguered crypto fund Three Arrows Capital (3AC) owes blockchain development lab Moonbeam Foundation over $17 million worth of stablecoins and $10 million worth of Moonbeam-issued tokens.
“We are reiterating our demand for the immediate repayment of our two outstanding loan principals ($7MM USDC and $10MM USDT),” Moonbeam director Aaron Evansa wrote to Three Arrows in June.
The agreement was made between Moonbeam Foundation and 3AC on Sept. 20, 2021. 3AC borrowed the open term loan at a 12% interest rate.
Separately, 3AC was additionally engaged by Moonbeam as a “liquidity consultant” for the network’s moonriver (MOVR) and glimmer (GLMR) tokens. Moonbeam is a smart contract network based on Polkadot that allows for interoperability between the Polkadot and Ethereum networks.
3AC held over 10 million GLMR tokens and 200,000 MOVR tokens. These have not been returned to Moonbeam as of July 15. These are valued at nearly $10 million at current market rates.
Under the terms of the liquidity consultancy, 3AC was tasked by Moonbeam to make “commercially reasonable efforts to open up new markets” for the two tokens, with the fund also conducting “market analysis” and suggesting new “suitable exchanges” for the tokens to trade on.
However, 3AC was not liable to “the ultimate performance” and had no specific trading volume targets. The obligations were “limited to making commercially reasonable efforts to advise on methods to increase liquidity” for river and glimmer tokens.
Meanwhile, the documents show that Moonbeam paid 3AC a sum of $90,000 as a six-month fee in installments for the consultancy services.
3AC has been an active investor in the digital asset industry in recent years, with investments across non-fungible tokens, decentralized finance, layer 1 blockchain firms, and crypto companies.
The fund, however, suffered massive losses following luna’s implosion in mid-May and a market-wide decline in June, leading to its insolvency. Lawyers involved in the liquidation proceedings of Three Arrows Capital in the British Virgin Islands have stated Su Zhu and Kyle Davies, the hedge fund’s founders, have not been cooperating in the proceedings so far and their current location is unknown.
