Court orders liquidation of Three Arrows Capital crypto fund

The liquidation of crypto hedge fund Three Arrows Capital was ordered by a British Virgin Islands court on Monday, a person with knowledge of the situation told CoinDesk.

Partners at New York-based financial consultancy Teneo Restructuring were called in to deal with the insolvency, the source said.

Three Arrows Capital, founded by Su Zhu and Kyle Davies in 2012, has suffered heavy losses in the recent sharp drop in cryptocurrency markets. The possibility of insolvency was reported in mid-June after the company, also known as 3AC, incurred at least $400 million in liquidations.

Cryptocurrency exchange Voyager Digital issued a default notice to 3AC this week after the fund failed to make required loan payments of 15,250 Bitcoin (BTC) and $350 million USDC. Voyager shares tumbled after it disclosed its exposure to 3AC.

Three Arrows Capital has been an active investor in the digital asset sector in recent years, with investments in non-fungible tokens (NFTs), decentralized finance, tier 1 blockchain companies, and other crypto industry startups.

Teneo declined to comment, and 3AC did not immediately respond to a request for comment from CoinDesk.

The court order and Teneo’s role were previously reported by the television channel Sky News.

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