Beleaguered cryptocurrency hedge fund Three Arrows Capital Ltd is considering a number of options to tackle its current problems including a sale of assets and a bailout by another firm, according to a report by The Wall Street Journal.

Beleaguered cryptocurrency hedge fund Three Arrows Capital Ltd is considering a number of options to tackle its current problems including a sale of assets and a bailout by another firm, according to a report by The Wall Street Journal.

News that the fund, one of the most active hedge funds in the digital assets space, had failed to meet margin calls first broke last week. And now it has emerged that founders of the 10-year-old fund – Su Zhu and Kyle Davies – have appointed legal and financial advisers to plot a way out of the current situation and provide a solution for investors. 

The Wall Street Journal report quotes Davies as saying that the firm was caught out by the collapse of terraUSD and its sister token luna after the stable coin's peg to the USD was broken. 

New Jersey-based crypto lender BlockFi is among several groups that liquidated at least some of Three Arrows' positions, according to the original FT report on Thursday, which cited unidentified sources familiar with the matter.

BlockFi CEO Zac Prince tweeted on Thursday that his company liquidated collateral against a loan to a large client that he did not name.