A court in the British Virgin Islands has issued a liquidation order for beleaguered crypto hedge fund Three Arrows Capital as the company faces insolvency, Sky News reported on Wednesday.
The order to liquidate 3AC was made on Monday (June 27, 2022) said Sky, and partners from financial advisory firm Teneo Restructuring could oversee insolvency procedures, per the report.
Crypto hedge fund Three Arrows Capital plunges into liquidation https://t.co/IGHwCtxp6G
— Sky News (@SkyNews) June 29, 2022
Three Arrows Capital co-founders previously claimed the firm considered offloading assets or securing bailouts from another company in a bid to bolster its balance sheet and meet liquidity demands. However, both Zhu and Davies have not made comments or issued updates regarding the situation since mid-June.
Three Arrows Capital On The Edge Of Insolvency
Following the collapse of Terra’s LUNA Classic token (formerly LUNA), Three Arrows Capital has reportedly fallen into a state of uncertainty. The digital asset hedge fund has racked up a series of bad debts after a $200 million exposure to Terra’s governance token shook the firm’s balance sheet.
The Singapore-based company founded by Su Zhu and Kyle Davies also borrowed significant assets and sums from a number of crypto platforms including BlockFi and Voyager Digital.
As EthereumWorldNews reported earlier this week, Voyager Digital issued a notice of default to 3AC after the company failed to meet the June 27 repayment deadline for its loan. Voyager intends to pursue recovery for $350 million in USDC and some 15,250 Bitcoins that Three Arrows borrowed from the platform.
3AC leveraged positions on exchanges like BITMEX also experienced liquidation after the firm did not answer a margin call from the service.
