Cryptocurrency hedge fund Three Arrows Capital has failed to margin calls for extra cash from lenders after a series of bets on digital assets backfired, according to a report by The Financial Times.

Three Arrows has become the lates victim of the cryptocurrency credit crunch falling big falls in the value of former star performers including bitcoin and ether. The Singapore-based firm is one of the biggest players in the cryptocurrency investment space and is active on both lending and trading platforms.

The report cites BlockFi, as US-based crypto lender, as one of the companies to liquidate – by mutual consent – at least some of Three Arrows' positions leaving the fund facing big losses, while Finblox, a platform that offers traders 90 per cent annualised yields for lending out crypto, reduced its withdrawal limits by two-thirds this week owing to the situation at Three Arrows.