Cryptocurrency hedge fund Three Arrows Capital (3AC) filed for bankruptcy in Chapter 15 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 case in a court in the southern district of New York on Friday, which legally protects US assets of insolvent foreign debtors from creditors in the US.
Founded in 2012 by Kyle Davis and Su Zhu, 3AC managed around $ 10 billion in assets as late as March, and later dropped to $ 3 billion in April. Like several other crypto firms, including lending giants Celcius and Babel Finance, 3AC̵[ads1]7;s fortunes are part of the so-called crypto “winter” that has dropped stable coins and sent Bitcoin’s value down.
Earlier this week, reports emerged that 3AC had failed to repay a $ 670 million loan granted by cryptocurrency broker Voyager Digital, which has since stopped all trades, deposits and withdrawals as a result. Sky News reported later that a court in the British Virgin Islands has ordered the liquidation of 3AC and that the company is allegedly working with the business consulting company Teneo to monitor the process.
In May, Davies and Zhu admitted in an interview with WSJ that the company lost on an investment of 200 million dollars after the crash of Luna and the sister coin TerraUSD. At that time, the two remained optimistic about the prospects for crypto, and told WSJ that they “have always been crypto-believers” and “still are”.