According to a report by Bloomberg, three Arrows Capital has filed for Chapter 15 Bankruptcy. 3AC used to be one of the largest crypto investment firms, but the recent market conditions have proven challenging for many firms in the sector.
3AC files for bankruptcy
This bankruptcy filing is not unexpected because the investment firm has already hinted at facing financial troubles. Before its collapse, 3AC managed around $10 billion in assets, according to Nansen, a blockchain analytics platform.
By filing for Chapter 15 Bankruptcy, 3AC will now work with the US and international US court systems to protect the assets of its debtors. This filing comes as 3AC defaults on its loan from Voyager Digital.
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Voyager Digital recently halted all deposits, withdrawals, and trading because of the ongoing market conditions. The exchange’s financial woes mainly stem from its exposure to Three Arrows Capital. 3AC has defaulted on a $646 million provided by Voyager, and the exchange issued a notice of default on this loan on Monday.
Earlier this week, a court in the British Virgin Islands issued an order to have 3AC liquidate its assets for failing to fulfill its loan obligations. 3AC is also under regulatory pressure. The Monetary Authority of Singapore reprimanded the exchange on Thursday for offering false and misleading information.
Three Arrows Capital’s collapse
Before its recent financial woes, 3AC used to be one of the largest hedge funds in the crypto space. The firm is popular for its many investments in the cryptocurrency sector. The company was created in 2012 by the co-founders Zhu Su and Kyle Davies. The company had invested in crypto assets such as Bitcoin, Ethereum, Solana, and Axie Infinity. It also invested in firms such as BlockFi.
3AC’s woes started with the collapse of Terra Luna. When the UST algorithmic stablecoin collapsed in May, 3Ac lost around $200 million from its investment. 3AC has since failed to meet its obligations and has already been liquidated by several firms, including BitMEX, FTX, and Deribit.
3AC is not the only crypto firm that is facing woes. Celsius Network is also looking at a possible bankruptcy filing.
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Source: https://insidebitcoins.com/news/3ac-files-for-bankruptcy-amid-financial-troubles