Three Arrows Capital files for bankruptcy
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Well, down the drain it goes
Hedge fund Three Arrows Capital (3AC) has filed for bankruptcy in a New York court. According to Bloomberg, Chapter 15 of the US Bankruptcy Code may protect 3AC from forfeiture of US assets during the liquidation process in the British Virgin Islands.
Three Arrows Capital sent the relevant documents after the announcement of the cryptocurrency broker Voyager Digital on the suspension of trading and withdrawal of funds from July 1, 19:00 GMT.
“This was a tremendously difficult decision, but we believe it is the right one given current market conditions. This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the appropriate time,” said Stephen Ehrlich, Chief Executive Officer of Voyager, the company that
On June 27, Voyager Digital sent 3AC a notice of default due to non-payment of a loan. The crypto broker has loaned the hedge fund 15,250 BTC (about $294 million at the time of writing) and 350 million USDC. Before that, Voyager Digital asked to close part of the debt of 25 million USDC and then demanded that the entire loan in BTC and stablecoins be repaid by June 27.
On June 23, the crypto broker reduced the daily withdrawal limit from $25,000 to $10,000 amid problems with 3AC. To protect clients’ assets, the company has agreed with Sam Bankman-Fried’s Alameda Research on a USDC 200 million loan and a 15,000 BTC revolving line of credit.
According to Nansen, founded by Su Zhu and Kyle Davis in 2012, Three Arrows Capital managed around $10 billion in assets. Amid the collapse of the cryptocurrency market and the collapse of Terra, 3AC was reported to be insolvent.
According to some reports, cryptocurrency platforms BitMEX, FTX, and Deribit liquidated 3AC positions due to the latter’s inability to meet margin requirements. The Monetary Authority of Singapore, where the hedge fund is headquartered, issued a reprimand to Three Arrows Capital for providing false information and exceeding the allowed threshold of assets under management. Cryptocurrency wallet exchange and provider Blockchain.com and platform Deribit have demanded the liquidation of 3AC.
Source: Voyager Digital
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