Claim $500Breaking: Court Orders Liquidation Of Three Arrows Capital
Crypto hedge fund Three Arrows Capital (3AC) has reportedly plunged into liquidation, as per a Sky News report. This move could deepen the crisis that is already grappling the crypto space.
Three Arrows Capital (3AC) Liquidation
According to the report, partners from Teneo Restructuring in the British Virgin Islands has been lined up to handle the insolvency of the Singapore-based firm. Earlier in the week, Voyager Digital said it had issued Three Arrows Capital with a notice of default.
The firm said one of its units had issued 3AC with a default notice for its inability to repay a loan. The loan amount includes 15,250 Bitcoin and $350 million in USDC, worth around $660 million.
The report added that the liquidation could be a key moment for the prospects of the rapidly growing cryptocurrency sector. However, it was unclear what the immediate financial implications would be for Three Arrows’ creditors.
Where Did It All Begin For 3AC?
For Three Arrows, the crisis situation began with the collapse of LUNA and UST in May. The firm bought money off investors and deposited it into the Anchor protocol.
Speculation is rife that Three Arrows did not inform investors about its interests in UST position. The company allegedly used counter-party funds to build a huge UST position in the Anchor protocol.
The insolvency process is likely to affect the crypto space, which is already reeling from losses and speculation of crypto winter. 3AC acquired loans from several lenders including Celsius, FTX, BlockFi, BitMEX and Nexo.
Sami Rusani, a crypto investor, said there is need for more regulations to further legitimize the crypto industry.
Also, this could have a bearing on the proposed crypto bill by U.S. senators Cynthia Lummis and Kirsten Gillibrand. The bill plans to regulate various cryptocurrencies in separate categories.
The regulatory oversight for various cryptocurrencies in the overall financial picture could come under question following 3AC’s liquidation.
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