Crypto hedge fund Three Arrows Capital (3AC) has been ordered to liquidate as plummeting crypto prices left the firm unable to repay creditors, Sky News reported.
See related article: Contagion risk from Three Arrows Capital weighs on Bitcoin, crypto
A court in the British Virgin Islands appointed two senior members of global advisory firm Teneo to manage the liquidation, according to a person familiar with the matter, cited by the Washington Post.
Teneo will soon set up a website allowing 3AC’s creditors to submit claims and stay informed on the insolvency.
The firm defaulted on a US$670 million loan from digital asset brokerage Voyager Digital on Monday, while a group of lenders including BlockFi canceled roughly US$400 million in loans to 3AC in mid-June.
A Hong Kong-based client has accused 3AC of using client capital to meet margin calls while ghosting creditors’ withdrawal requests funds.
3AC’s confidence was shaken in May’s Terra crash after buying US$200 million worth of LUNA tokens for Luna Foundation Guard’s US$1 billion raise in February, cofounder Kyle Davies told the Wall Street Journal.