Court Orders Liquidation of Crypto Hedge Fund Three Arrows Capital

A British Virgin Islands court reportedly ordered Three Arrows Capital into liquidation earlier this week, further complicating the crypto hedge fund’s situation.

On Monday, a BVI court reportedly ordered 3AC to liquidate its assets. Teneo Restructuring partners were said to be in charge of managing 3AC’s insolvency. 3AC is based in Singapore but is registered in the British Virgin Islands.

Three Arrows Capital must now formally liquidate assets tied to its British Virgin Islands company.

The ruling comes almost two months after 3AC got its first whiff of trouble with the crash of LUNA and UST tokens.

Three Arrows Capital is in default on a $665 million loan

Basically, in these cases, restructuring units like Teneo are primarily concerned with protecting the collapsed company’s assets and ascertaining who its creditors are.

Two Teneo employees have been assigned to oversee the liquidation of 3AC. According to one source acquainted with the situation, Teneo will now establish a website through which creditors can file claims against Three Arrows Capital.

Su Zhu and Kyle Davies, bitcoin investors, started the firm in 2012. 3AC ran crypto hedge funds and served as venture capitalists in the digital asset market.

Furthermore, 3AC has been trailed by insolvency rumors in recent weeks, including that it lost up to $400 million in liquidations when cryptocurrency prices crashed in May and June.

Kyber Network, a blockchain initiative in which 3AC invested, later described the firm’s treasury management services, which included handing a portion of its capital to 3AC for potential profit. Those funds are still unaccounted for.

However, the full depth of 3AC’s financial difficulties was disclosed last week when digital asset management Voyager Digital reported that Three Arrows Capital had failed to make payments on debts totalling $350 million in USDC and 15,250 BTC ($306 million).

Three Arrows Capital co-founder and Chairman Kyle Davies said the firm is committed to working things out. He added that the firm would consider options like a rescue by another firm or selling some of its assets.