Liquidators of the collapsed cryptocurrency hedge fund Three Arrows Capital are seeking at least $1.3 billion in damages from Terraform Labs, the bankrupt digital assets firm co-founded by Do Kwon.

Marathon Digital Holdings, Inc. (NASDAQ: MARA), one of the world's largest Bitcoin mining firms, has announced its plans to privately offer $250 million in convertible senior notes due 2031.

Boerse Stuttgart Digital has announced that KfW, Germany's largest development bank, selected it to provide the technical infrastructure for a new blockchain-based digital bond.

Top stories in the Crypto Roundup today:

• Three Arrows Capital Liquidators Seek $1.3 Billion from Terraform Labs
• Marathon Digital Announces $250 Million Private Offering to Acquire More Bitcoin
• KfW Partners with Boerse Stuttgart Digital for Blockchain-Based Digital Bond
• Crypto Open Interest Drops to $46.8 Billion in July

Three Arrows Capital Liquidators Seek $1.3 Billion from Terraform Labs

Liquidators of the collapsed cryptocurrency hedge fund Three Arrows Capital are seeking at least $1.3 billion in damages from Terraform Labs, the bankrupt digital assets firm co-founded by Do Kwon.

The legal action stems from substantial losses Three Arrows Capital suffered following the 2022 crash of TerraUSD (UST) and Luna, tokens that were central to Terraform Labs' operations.

The liquidators, appointed by a British Virgin Islands court, allege that Terraform Labs induced Three Arrows Capital to invest heavily in Luna and TerraUSD by artificially inflating their prices through market manipulation.

Court filings indicate that Three Arrows acquired $190 million worth of Luna in January 2022 as part of a larger $1 billion deal. By the end of April 2022, Three Arrows held approximately $462 million in Luna, but this value dropped to just over $2,700 by mid-May after a massive selloff of TerraUSD, which triggered the collapse of both tokens.

The crash not only wiped out Three Arrows’ investment in Luna and TerraUSD but also caused significant losses across its other digital asset holdings, with the net value of these holdings dropping by about $858 million during the same period. The collapse of TerraUSD and Luna was a major factor in the downfall of Three Arrows Capital, once one of the most prominent hedge funds in the cryptocurrency space.

Terraform Labs, which filed for Chapter 11 bankruptcy in January 2024, is preparing to liquidate after being found liable for fraud in a U.S. lawsuit earlier this year. The extent of recovery from Terraform Labs remains uncertain. Meanwhile, Do Kwon, arrested in Montenegro last year, is facing extradition to South Korea and charges in both the U.S. and his home country.

Marathon Digital Announces $250 Million Private Offering to Acquire More Bitcoin

On August 12, Marathon Digital Holdings (NASDAQ: MARA), one of the world's largest Bitcoin mining firms, announced its plans to privately offer $250 million in convertible senior notes due 2031. This offering, which will be made to qualified institutional buyers under Rule 144A of the Securities Act of 1933, is subject to market conditions and other factors.

The proposed notes will be unsecured senior obligations of Marathon Digital and will bear interest payable semi-annually, starting 1 March 2025, with the notes set to mature on 1 September 2031.

Holders of the notes will have the option to convert them into cash, shares of Marathon’s common stock, or a combination of both at the company’s discretion. The notes will be convertible under certain conditions before March 2031 and freely convertible thereafter until two days before the maturity date.

Marathon Digital has also included an option for the initial purchasers to acquire an additional $37.5 million in notes within a 13-day period from the initial issuance date. Additionally, starting 6 September 2028, Marathon reserves the right to redeem all or part of the notes, provided that at least $75 million of the principal amount remains outstanding if fewer than all notes are redeemed.

The company intends to use the proceeds from this offering primarily to purchase additional Bitcoin. Other potential uses include general corporate purposes such as working capital, strategic acquisitions, expansion of existing assets, and debt repayment.

These notes and any shares of Marathon’s common stock issued upon conversion are not registered under the Securities Act and will be offered solely to qualified institutional buyers through a private offering memorandum.

KfW Partners with Boerse Stuttgart Digital for Blockchain-Based Digital Bond

Boerse Stuttgart Digital has announced that KfW, Germany's largest development bank, selected it to provide the technical infrastructure for a new blockchain-based digital bond.

Boerse Stuttgart Digital—the digital arm of the Boerse Stuttgart Group, one of Germany's leading stock exchanges—will manage wallet services and ensure private key security throughout the issuance and redemption processes of KfW’s planned digital bond.

This bond issuance complies with the German Electronic Securities Act (eWpG), which governs the issuance of electronic securities in Germany. This project also represents the first time Boerse Stuttgart Digital has extended its services to include both wallet management and private key security for tokenized securities.

KfW, a major global bond issuer, is actively pursuing digitalization initiatives as part of its broader strategy to modernize financial operations while Boerse Stuttgart Digital was recently involved in the European Central Bank’s (ECB) EU-wide trials for the settlement of blockchain-based financial transactions against central bank money.

As part of these trials, the company provided wallet services and ensured the security of private keys, which aligns with its role in the KfW digital bond project.

Crypto Open Interest Drops to $46.8 Billion in July

Open interest on retail derivatives exchanges contracted 0.60% to $46.8 billion in July in a decline that coincided with a surge in volatility triggered by the launch of spot Ethereum exchange-traded funds and a rally in major digital assets toward resistance levels.

While Binance experienced a 4.35% drop in open interest to $18.6 billion, OKX, Bybit, and Bitget saw increases of 1.02%, 4.21%, and 1.67%, respectively, reaching $12.7 billion, $6.45 billion, and $8.89 billion.

Dig deeper via CCData’s latest Exchange Review report.

State of the Crypto by Top Tier Exchange Volume

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