Three Arrows Capital, a hedge fund focused on cryptocurrency, has sunk into liquidation, deepening the crisis engulfing the global digital asset sector.
Sky News has learned that Teneo’s partners in the British Virgin Islands have lined up to deal with the insolvency of the Singapore-based company, which was set up in 2012 by Su Zhu and Kyle Davies.
Cryptocurrency experts said Wednesday that liquidation would be an important moment in the current disarticulation of the cryptocurrency sector, which has grown at a dizzying rate in recent years.
It was unclear what the immediate financial implications would be for Three Arrows creditors.
However, the disappearance of the company is likely to raise more questions about the regulatory oversight to which cryptocurrencies and other digital assets are subject in the world’s major financial centers.
The Three Arrows Capital crisis was highlighted earlier this month when Voyager Digital, a cryptocurrency broker, said it was considering issuing a default warning in relation to a loan worth hundreds of millions of dollars.
The cryptocurrency landscape is undergoing a tumultuous shift amid a collapse in asset valuations such as stablecoins: digital currencies linked to the value of assets such as the US dollar or gold.
Davies told the Wall Street Journal in an interview this month that he was “committed to resolving things and finding a fair solution for all of our voters.”
He added that Three Arrows was exploring options such as the sale of assets or a ransom by another company.
It was unclear whether these talks continued on Wednesday or whether any form of sale of Three Arrows assets by its liquidators was still possible.
A person familiar with the situation confirmed that on June 27 a court order had been issued in the BVI to liquidate Three Arrows.
Three Arrows Capital did not respond to a request for feedback sent by email, while Teneo was contacted for feedback.