Cryptocurrency hedge fund Three Arrows Capital (3AC) has filed for Chapter 15 bankruptcy in an attempt to protect its US assets from creditors in the country, as previously reported by Bloomberg and CNBC. Representatives of the Singapore-based company filed the application on Friday in New York’s Southern District Court, which legally protects the US assets of insolvent foreign debtors from US creditors.
Founded in 2012 by Kyle Davis and Su Ju, 3AC managed about $10 billion in assets in March, which later dipped to $3 billion in April. Like several other crypto firms, including credit giants Celcius and Babel Finance, 3AC’s fortunes turnover is part of the so-called crypto “winter” that has taken down stablecoins and sent bitcoin’s value plummeting.
Earlier this week, reports surfaced that 3AC had defaulted on a $670 million loan provided by crypto broker Voyager Digital, which has since suspended all trades, deposits and withdrawals as a result. Sky News later reported that a court in the British Virgin Islands had ordered the liquidation of 3AC and that the firm was reportedly working with business consultancy Teneo to oversee the process.
In May, Davis and Zhu admitted in an interview with the WSJ that the company lost a $200 million investment following the collapse of Luna and its sister coin TerraUSD. At the time, the two remained optimistic about crypto’s prospects, telling the WSJ that they “have always been believers in crypto” and “still are.”
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