August 14, 2022

Three Arrows Capital files for bankruptcy

Three Arrows Capital files for bankruptcy

Hedge fund Three Arrows Capital (3AC) has filed for bankruptcy in a New York court. It is reported by Bloomberg.

As writes agency, Chapter 15 of the US Bankruptcy Code may protect 3AC from forfeiture of US assets in a liquidation 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, 21:00 (Kyiv / Moscow time).

“It was an extremely difficult decision, but wewe consider it correct in the current market conditions. It will give us more time to explore strategic alternatives,” said Voyager CEO Steven Ehrlich.

On June 27, Voyager Digital sent a notification to 3ACon default due to non-payment of the loan. The crypto broker has loaned the hedge fund 15,250 BTC (about $294 million at the time of writing) and 350 million USDC.

On June 24, Voyager Digital asked to close part of the USDC 25 million debt, and then demanded that the entire loan in BTC and stablecoins be repaid by June 27.

On June 23, the crypto broker lowered the daily limit bywithdrawing funds 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.

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According to Nansen, founded by Su Zhu and KyleDavis in 2012, Three Arrows Capital managed about $10 billion in assets. Against the background of the collapse of the cryptocurrency market and the collapse of Terra, information appeared about the insolvency of 3AC.

Recall that the trading company 8 Blocks Capital accused the hedge fund of using client funds to cover margin calls.

According to some reports, cryptocurrency platforms BitMEX, FTX and Deribit liquidated 3AC positions due to the latter's inability to meet margin requirements.

Monetary Authority of Singapore, whereregistered the headquarters of a hedge fund, issued a reprimand to Three Arrows Capital for providing false information and exceeding the allowed threshold of assets under management.

Exchange and cryptocurrency wallet provider Blockchain.com and platform Deribit have demanded the liquidation of 3AC.

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