Data from various media outlets state that a court in the Virgin Islands demands the liquidation of crypto hedge fund Three Arrows Capital. The situation is difficult for the crypto hedge fund Three Arrows Capital.
Now, a court in the British Virgin Islands has ordered the liquidation of Singapore-based Three Arrows Capital, 3AC, underscoring the crisis gripping the digital asset sector. The information initially came from the Sky News media, which said it came from a party linked to the matter and got repeated by other media in English. None have confirmed directly with 3AC spokespersons.
It is worth considering that the bad things about this entity had already been happening. On Monday, June 27, the cryptocurrency platform Voyager Digital, a digital asset broker offering up to 12% returns, filed the breach notice. According to the report, Voyager sent the notice to Three Arrows Capital for a debt of 15,250 bitcoins and $350 million USDC.
The Crisis Gets Even Worse
Sky News noted that partners at Teneo Restructuring company in the British Virgin Islands joined efforts to deal with the insolvency of the Singapore-based firm, which was set up in 2012 by Su Zhu and Kyle Davies.
Some experts highlighted today that the liquidation would suppose a relevant moment in the current collapse of the digital asset sector, which has grown increasingly fast in recent years.
The situation regarding immediate financial implications for Three Arrows’ creditors remains unclear. However, the entity’s demise would probably raise further questions about the regulatory oversight that digital assets and other currencies face in the most prominent financial centers worldwide.
During an interview with the Wall Street Journal, Davies said he was committed to finding an equitable solution for all the constituents.
He expressed that Three Arrows was looking for alternatives such as asset sales or a bailout by another entity. It was unclear whether such proposals keep happening today or whether some form of sale of Three Arrows’ assets by its liquidators persisted.
Three Arrows Capital became one of the most prominent digital assets hedge funds. However, it got damaged by the sudden Crashdown of the Terra blockchain. Then, when the comprehensive crypto market crumbled, this fall generated a lot of struggles for the fund, and they did not comply with margin calls.
It was not long before cryptocurrency exchanges FTX, Deribit, and BitMEX liquidated Three Arrows Capital’s positions.
On June 14, Su Zhu tweeted that they were in the process of communicating with substantial parties, and they were fully committed to resolving this situation. After that, he had not tweeted about the matter again.
By: Jenson Nuñez
