A court in the British Virgin Islands has directed that the embattled crypto hedge fund Three Arrows Capital (3AC) to be liquidated. The liquidation order comes a few days after Voyager Digital issued a notice of default to the hedge fund firm.
The Singaporean crypto hedge fund has been going through a hard time in the past few weeks following the crisis gripping the cryptocurrency sector. Its woes started with the fall of Terra LUNA, which seemingly started a ripple effect that is still being felt throughout the crypto space.
According to reports, several partners including Teneo in the British Virgin Islands are lining up to handle the insolvency of the crypto hedge fund which has been in operation for the last 10 years since its launch in 2012 by Su Zhu and Kyle Davies.
What does 3AC liquidation mean to the crypto market?
Crypto insiders opine that the liquidation will have a significant impact on the cryptocurrency sector which is already undergoing difficulties due to plummeting market prices which has also caused the market to become extremely volatile.
Although it is still unclear what the immediate financial implications will be, 3AC’s demise is likely to rise more questions about the future of digital assets. And the 3AC creditors will certainly be the first to feel the pinch.
It would be noted that the default notice issued to the 2AC by Voyager Digital was in relation to a loan worth hundreds of millions of dollars.
In an interview with the Wall Street Journal earlier this month, the Three Arrows Capital co-founder Kyle Davies said:
“We are committed to working things out and finding an equitable solution for all our constituents”.
Davies had also said that the hedge fund was looking at alternative ways of rescuing the firm including the sale of assets or being rescued by another firm.