3AC: court declares bankruptcy of crypto fund
3AC: court declares bankruptcy of crypto fund
Crypto

3AC: court declares bankruptcy of crypto fund

By Vincenzo Cacioppoli - 29 Jun 2022

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A court in the Virgin Islands has declared bankruptcy for 3AC crypto fund, which has been facing a liquidity crisis for some time.

It’s official: 3AC fund declares bankruptcy

Just two days after cryptocurrency broker Voyager had put the Three Arrows Capital fund in default, a Virgin Islands court has now reportedly declared the fund bankrupt

Voyager Ltd had warned the fund that without payment of $25 million by day 27 on the $350 million loan the fund took out with the broker, it would file for default proceedings, a sort of antechamber to bankruptcy.

Now from the Virgin Islands comes news of the crypto fund’s default demand by a court, which could spell the end of the story of one of the most innovative funds in the crypto world, hard hit by the downturn in the markets. 

According to some sources, since the beginning of the year alone, the fund has lost more than $40 million.

On the other hand, the 3AC hedge fund, co-founded in 2012 by Zhu Su and Kyle Davies, is based in Singapore and has always been considered not only one of the most important crypto hedge funds but also one of the riskiest, making bets on highly leveraged markets. 

Market crash punishes those highly exposed to cryptocurrencies

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The collapse of cryptocurrencies is putting the entire sector in difficulty

The highly negative phase of the markets has forced the fund to come back from some of its positions in losses and thus find itself in serious difficulty in meeting some important deadlines, such as the one with Voyager.

In addition to Voyager, there would also be another loan taken out with the company BlockFi, which 3Ac would not be able to comply with, according to some inside sources. 

At this point, a bankruptcy, as required by the Virgin Islands court, seems increasingly likely.

The top management has been trying in recent days to reassure customers, but at the same time could not deny the very difficult time on the liquidity front. 

According to the Financial Times, the fund reportedly had significant exposure to Terra and its stablecoin. The failure of these would have had heavy repercussions on the fund’s accounts as well.

The news immediately caused the entire market to drop substantially, with BTC down 5%, due to fears of possible contagion to other entities in the crypto world. Celsius, too, has had liquidity problems in recent weeks, blocking withdrawals from its accounts.

Vincenzo Cacioppoli

Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.

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