Crypto-Winter Victim: Crypto Hedge Fund 3AC Files for Bankruptcy
- Crypto hedge fund, 3AC filed for bankruptcy to protect its assets from creditors.
- Last week 3AC defaulted on a loan from Voyager Digital.
- 3AC had been severely impacted by the Terra LUNA and UST crash in May.
Three Arrow Capital (3AC), a leading crypto hedge fund, filed for Chapter 15 bankruptcy in the US to stop creditors from seizing its assets in the country, days after its liquidation started in the British Virgin Islands.
BREAKING: Three Arrows Capital has filed for Chapter 15 bankruptcy in New York. pic.twitter.com/U0SdHXSXWg
— Watcher.Guru (@WatcherGuru) July 1, 2022
Singapore-based 3AC is among the high-profile investors whose major capital has fallen into liquidation. This marked one of the biggest casualties of the latest “Crypto Winter.” Representatives from the company made the bankruptcy filing in a Southern District New York (Manhattan) court on June 1, which legally shields the US assets of insolvent foreign debtors from creditors in the US.
Last week, a court in the British Virgin Islands ordered the liquidation of 3AC’s capital after they failed to repay a $670 million loan provided by Voyager Digital, a crypto broker. As a result, this has halted all trades, transactions, deposits, and withdrawals. However, 3AC is considering employing business consulting company Teneo to oversee the process.
The fund, co-founded by former Credit Suisse traders Zhu Su and Kyle Davis, managed around $10 billion of assets as recently as March, later dipping to $3 billion in April, as reported by blockchain analytics firm, Nansen.
Based on a report from last month, US-based crypto lenders Genesis and BlockFi have liquidated some of 3AC’s positions since 3AC borrowed from these lenders but was unable to meet the margin call.
3AC was severely impacted by the exposure to the collapsed algorithmic stablecoin Terra USD and sister token LUNA where it lost about $200 million in investment. Despite that, the co-founders Davies and Zhu remained optimistic about the prospects of crypto, as they spoke in a WSJ interview stating they have “always been crypto believers” and “still are.”
In this bankruptcy case, the law firm Latham & Watkins is representing 3AC.
Read more: https://coinquora.com/crypto-winter-victim-crypto-hedge-fund-3ac-files-for-bankruptcy/
Text source: News – CoinQuora – Latest Cryptocurrency and Block
