Three Arrows Capital fund liquidated by court: implications for the crypto market

A court in the Virgin Islands has ordered the liquidation of hedge fund Three Arrows Capital and all of the assets it owns. The verdict was in response to 3AC’s claim that they could not repay Voyager Digital’s 15,250 BTC and $350 million in debt.

According to Sky News, Teneo Restructuring Limited will handle 3AC’s bankruptcy. They are tasked with liquidating all assets and paying off debts to creditors.

Until recently, Three Arrows Capital was one of the largest hedge funds investing in digital assets. But due to the market crash, the company was unable to replenish its creditors’ deposits – mostly BTC borrowed from BlockFi – resulting in its insolvency.

The aftermath

The liquidation of Three Arrows Capital will have a major impact on the cryptocurrency market. It is a major player, the collapse of which will raise a wave of questions about the regulation of such funds. In addition, crypto haters get another reason to call for strict controls on digital assets.

Another problem looming on the horizon is a crisis of distrust even of the big established companies. Rumors of problems at 3AC began surfacing about a month ago. But Three Arrows Capital executives assured that they were “working to solve the problem.” Apparently, they had long known that the company was one foot in the grave, but continued to deceive investors.