3AC, the troubled crypto hedge fund that has been making headlines these days, has filed for bankruptcy. Court filings indicate that Three Arrows Capital wants to go with Chapter 15 proceedings, as this will prevent creditors and liquidators from seizing the assets of the company in the United States.
There had been reports circulating in the market that the MAS (Monetary Authority of Singapore) had reproached 3AC (Three Arrows Capital) for violation of some regulations and for providing false information. Moreover, there had also been reports that the British Virgin Islands (BVI) had issued a court order for the liquidation of the company.
Now, it has been confirmed via court filings that the crypto hedge fund has filed for bankruptcy. Jeremy Hill of Bloomberg was also to access the court documents and he published a report to shed light on the situation. According to Hill, the company has filed for Chapter 15 bankruptcy, which means it will be recognized in the United States.
In this way, the assets of the hedge funds in the US will remain protected from creditors and liquidators. On Friday, Hill reported that the bankruptcy petition was filed on the same day by the hedge fund in New York. The reporter also disclosed that Three Arrows Capital had sought the representation of Latham & Watkins for filing on its behalf.
The bankruptcy case was filed by the law firm in Manhattan’s Southern District of New York. While the headquarters of the crypto hedge fund is based in Singapore, its co-founder Su Zhu had mentioned shifting to Dubai last April. The hedge fund is also using the services of Teneo for dealing with the court order it was issued in the British Virgin Islands. The company is dealing with the liquidation process in that jurisdiction.
Market analysts said that the billion-dollar failure of the crypto hedge fund would have a huge impact on the crypto market and it is likely to continue experiencing turmoil. There are expected to be plenty of deleveraged positions, as there are plenty of indicators to support this statement. It has become almost like a contagion and some of the big crypto companies are stepping in to provide assistance.
This was in reference to the recent happenings in the crypto market. Alameda Research, a crypto firm that belongs to the founder of the FTX exchange, Sam Bankman-Fried recently extended its assistance to Voyager Digital. The crypto lender had recently issued a default notice against Three Arrows Capital, as the latter had not made a payment due on its loan.
Likewise, the FTX exchange has also stepped in to assist BlockFi, which was also facing financial issues. The announcement of the 3AC liquidation came after Voyager Digital had announced that it was pausing deposits and withdrawals on its platform, along with loyalty rewards. It also said that its cards were also not going to function, so its clients would not be able to use them for anything.