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.
BREAKING: British Virgin Islands court reportedly orders liquidation of Three Arrows Capital.
— Watcher.Guru (@WatcherGuru) June 29, 2022
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.
JUST IN: Voyager has issued a notice of default to 3AC for failure to repay $670 million in loans
— Blockworks (@Blockworks_) June 27, 2022
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
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.
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.