Court orders liquidation of Three Arrow Capital Court orders liquidation of Three Arrow Capital
A British Virgin Islands Court has ordered the liquidation of Three Arrows Capital (3AC), plunging the crypto hedge fund into a deeper crisis.
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Updated: Jun. 29, 2022 at 3:43 pm UTC
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A British Virgin Islands Court has ordered the liquidation of Three Arrows Capital (3AC), plunging the crypto hedge fund into a deeper crisis, Sky News reported.
According to the report, Teneo Restructuring has been mandated to handle 3AC’s restructuring.
Earlier in the week Voyager Digital issued 3AC with a notice of default after failing to repay a loan worth around $660 million, 15,250 Bitcoin, and $350 million in USDC.
Although 3AC has yet to comment on the decision, many believe the ruling is a pivotal moment for the struggling cryptocurrency industry. The financial implications of the liquidation for 3AC creditors are unclear.
The ruling comes almost two months after 3AC got its first whiff of trouble with the crash of LUNA and UST tokens.
According to reports, the firm allegedly acquired a significant UST position in Anchor using counterparty funds without informing investors.
3AC 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.
However, with a mandatory liquidation now imminent, it is unclear how 3AC will proceed.
3AC liquidation could have a ripple effect on crypto industry
The liquidation of 3AC is sure to have a ripple effect on the crypto space because of its plethora of creditors in the industry, including Celsius, BitMex, and BlockFi.
Beyond that, its liquidation could also influence future regulations on the cryptocurrency industry.
A newly proposed crypto bill by senators Cynthia Lummis and Kirsten Gillibrand is currently receiving recommendations from stakeholders in the crypto space.
Apart from that, the president of the European Central Bank (ECB), Christine Lagarde, has urged regulators to introduce new laws that guide crypto activities like staking and lending.
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Posted In: Legal
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Terra Classic
$0.00011
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Voyager
Voyager Digital is a bankrupt cryptocurrency exchange company in the United States that was founded in 2018.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Nexo
Nexo is a leading global financial institution specializing in digital asset services, particularly focusing on cryptocurrency lending, exchange, and financial management solutions.