Cody McGrath 
The hedge fund Three Arrows Capital liquidation issues saw Avalanche pulling away from the firm as it stated on Friday that it has little exposure to it.
Avalanche mentioned in a tweet that Three Arrows never had any influence over Avalanche’s treasury funds.
The comments come as Three Arrows’ positions face potential liquidation as the hedge fund failed to fulfill several margin calls by lenders.
Avalanche AVAX price plummeted amid 3AC Dump fear
Last year, Three Arrows Capital, along with Polychain, led a $230 million investment in Avalanche, in which the blockchain issued AVAX tokens to Three Arrows in a private sale.
The value of AVAX, Avalanche’s native token, has dropped this week amid concerns that Three Arrows may sell its stake to cover its positions. The token has lost approximately 32% in the last seven days at $16.41. Its weakness has also been deepened by a general decline in the cryptocurrency market.
As the market situation worsens, Three Arrows is liquidating its Lido Staked Ethereum (stETH) funds. It liquidated 15k stETH in one hour earlier this week and has been lowering its exposure to the token regularly.
According to the recent update, 3 Arrows Capital has liquidated all of the stETH held in the wallet. stETH has dropped 39.76% in the last seven days and is still trading at a significant discount to Ethereum.
Several Crypto lenders deny exposure to 3AC
Avalanche isn’t the first to say something like this about Three Arrows Capital. NEXO, a cryptocurrency lender, has also stated that 3AC has no exposure to its digital assets.
BlockFi had announced earlier on Friday that it had liquidated a “large client” who had failed to satisfy its obligations. While reports said it was likely Three Arrows, BlockFi assured investors that the company was financially solid.
Three Arrows’ liquidity concerns have contributed to the crypto market’s recent fall in the past weeks.