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Cryptocurrency hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy in a bid to protect its US assets from creditors in the country, as reported earlier by Bloomberg and CNBC. Representatives for the Singapore-based company made the filing in a Southern District New York court on Friday, which legally protects the US assets of insolvent foreign debtors from creditors in the US.
Founded in 2012 by Kyle Davis and Su Zhu, 3AC managed about $10 billion in assets as recently as March, later sinking to $3 billion in April. Like several other crypto firms, including the lending giants Celcius and Babel Finance, 3AC’s turn in fortunes is part of the so-called crypto “winter” that’s brought down stablecoins and sent Bitcoin’s value plunging.
Earlier this week, reports emerged that 3AC failed to pay a $670 million loan provided by crypto broker Voyager Digital, which has since halted all trades, deposits, and withdrawals as a result. Sky News later reported that a court in the British Virgin Islands has ordered 3AC’s liquidation and that the firm is reportedly working with business consulting company Teneo to oversee the process.
In May, Davies and Zhu admitted in an interview with the WSJ that the company lost out on a $200 million investment following the crash of Luna and its sister coin TerraUSD. At the time, the two remained optimistic about the prospects of crypto, telling the WSJ that they’ve “always been crypto believers” and “still are.”