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Cryptocurrency Hedge Fund Three Arrows Files For Bankruptcy In The US

The current crisis in the digital market might have hit the popular cryptocurrency hedge fund, Three Arrows Capital.

Reports indicate that a British Virgin Islands court ordered Three Arrows that the company go into liquidation.

It was learned that the firm has filed for a Chapter 15 bankruptcy, which enables cooperation between international and U.S. court systems and is typically filed to protect the debtor’s assets.

Partners from Teneo in the British Virgin Islands have been lined up to manage the bankruptcy of the Singapore-based business.

Three Arrows’ collapse may be attributed to a variety of reasons, one of which includes its inability to pay up a loan it took of about 15,250 Bitcoin, estimated to be worth about £252 million.

The loan, taken from Voyager Digital was used by 3AC to invest in the now crashed Terra Luna token.

Earlier this month, Voyager Digital, a crypto broker, said it was considering issuing a default notice about a loan worth hundreds of millions of dollars.
Recall that the collapse of the Luna token had wiped out about $2 million in crypto late last year.

Earlier during the week, the Monetary Authority of Singapore had issued a query to 3AC for providing false information and exceeding the maximum amount of money it was allowed to manage.

According to the MAS, Three Arrows had obtained a local registration in 2013 that allowed it to manage up to S$250 million ($180 million).

MAS said that Three Arrows breached the limit on assets under management from July 2020 to September 2020, and from November 2020 to August 2021.

3AC’s liquidation has sparked concerns that the crypto sector crisis may be worsened, paired with rising inflation and fears of an economic downturn.

Timeline
● The company was established by Su Zhe and Kyle Davies in 2012.

● The firm lost about $200 million to the collapse of algorithmic stablecoin  UST destabilized and plunged in value in May.

● A court order to liquidate Three Arrows was issued on June 27 in the British Virgin Islands.

● Earlier this month, Voyager Digital, a crypto broker, said it was considering issuing a default notice to 3AC about a loan worth about £252 million

● On Thursday the Monetary Authority of Singapore (MAS) accused Three Arrows Capital of exceeding its assets threshold and providing false information.

● MAS said it had “reprimanded” 3AC and accused it of providing misleading information concerning its relocation to the British Virgin Islands in 2021. It did not detail any penalties.” In light of recent developments which call into question the solvency of the fund … MAS is assessing if there were further breaches,” the regulator said in a statement.”

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