Crypto hedge fund firm Arca shuts down its TerraUSD-exposed $20 million worth digital yield fund citing “market downturn.”
Arca CEO Rayne Steinberg stated, “After a strategic business review, we have decided to close our Digital Yield Fund which took effect Aug. 31. Given changing market conditions, we believe that this decision was in the best interest of our investors.”
Arca is still willing to release a similar product at some point. In addition, Arca oversees a $30 million venture fund, a $50 million NFT fund, and a $192 million flagship digital assets fund.
Also Read: Arca Closes $30 Million Venture Fund for Startup Investments
Arca disclosed that the fund has exposure to Terra’s defunct terraUSD (UST) stablecoin in an investor letter issued in May. The capital from the digital yield fund is now returned to the investors.
The insider claimed that the exposure didn’t compel the closure but rather served as an instance of how market turmoil changed Digital Yield’s risk-reward balance.
