The Three Arrows Capital (3AC) cryptocurrency hedge fund filed for bankruptcy in Chapter 15 in order to protect its U.S. assets from the country’s creditors, as previously reported by Bloomberg and CNBC. Representatives of the Singapore-based company filed the filing Friday in a Southern New York district court, which legally protects U.S. assets from insolvent foreign debtors from U.S. creditors.
Founded in 2012 by Kyle Davis and Su Zhu, 3AC managed about $ 10 billion in assets in March, and then sank to $ 3 billion in April. Like several other crypto companies, such as lending giants Celcius and Babel Finance, 3AC’s turnaround is part of the so-called cryptocurrency “winter” that has brought down stable currencies and brought down the value of Bitcoin.
Earlier this week, reports surfaced that 3AC failed to repay a $ 670 million loan provided by cryptocurrency broker Voyager Digital, which has since stopped all transactions, deposits and withdrawals as a result. Sky News later reported that a court in the British Virgin Islands has ordered the liquidation of 3AC and that the company is said to be working with business consulting firm Teneo to oversee the process.
In May, Davies and Zhu admitted in an interview with the WSJ that the company lost a $ 200 million investment after the crash of Luna and its sister currency TerraUSD. The two then remained optimistic about the prospects for cryptography, and told the WSJ that “they have always been believers in cryptography” and “they still are.”