Singapore-based cryptocurrency investment startup Three Arrows Capital filed for bankruptcy in a New York court.
According to analyst firm Nansen, Three Arrows Capital’s capital reached $10 billion in March 2022, but due to the Terra Classic Digital Asset Crash (LUNC) in May, the firm suffered huge losses and was unable to repay its debt.
The hedge fund’s financial position took a hit and its accounts on cryptocurrency exchanges FTX, Deribit and BitMEX no longer met margin requirements. Consequently, the trading platforms closed the company’s positions.
On June 27, a court in the British Virgin Islands ordered the liquidation of Three Arrows Capital and ordered two employees of consulting firm Teneo to oversee the startup’s closure. They will oversee negotiations to sell the hedge fund’s assets.
Three Arrows Capital executives filed for bankruptcy in the U.S. to protect their property. Under U.S. law, creditors do not have the right to seize the assets of a company that has declared bankruptcy. The Latham & Watkins law firm will defend the Singapore firm in court.