Singapore-based crypto fund Three Arrows Capital (3AC) has been ordered into liquidation by a court in the British Virgin Islands, according to Sky News.
Sky News indicated that Teneo Restructuring will participate in the procedure.
Decrypt contacted Teneo for more details on the liquidation.
Liquidation refers to the official closure of a business due to its inability to repay its debts and other financial obligations. Whatever assets the company owns are then sold piecemeal to various creditors with outstanding loans. It is currently unclear exactly which companies will have their claims satisfied and when.
A bull market darling from last year, 3AC, led by Kyle Davies and Su Zhu, has been the center of attention amid the recent crypto market downturn.
What happened to Three Arrows Capital?
Rumors of dismantling the fund began following the implosion of Terra and its algorithmic stablecoin UST in May.
3AC suffered a loss of around $200 million as a result of the project’s collapse, Davies telling the the wall street journal that “the Terra-Luna situation caught us off guard.”
As the market continued to slide, crypto exchanges BitMEX, FTX, and Deribit also liquidated 3AC’s positions after the crypto fund failed to meet margin calls.
Other open positions continued to emerge, with crypto broker Voyager Digital also revealing $661 million in exposure to the fund. The loan consisted of 15,250 Bitcoin and $350 million in the stablecoin USDC. After 3AC again failed to make even partial payments to Voyager, the broker issued a notice of default on Monday.
A notice of default is an official response issued by a lender whenever a borrower has missed payments on their loan. Such a note does not guarantee that the lender will be compensated, but it may mean that he could soon collect the initial guarantee.
Today, Bitcoin is hovering around $20,000 a coin, a steep drop of 70% from last November’s high of $69,789.
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