Recent court filings reveal that the bankruptcy petition was filed by Three Arrows Capital Ltd., also known as 3AC. This crypto-hedge fund is in serious financial trouble. The court papers show 3AC is aiming for an ancillary Chapter 15 proceeding so liquidators and creditors cannot seize the firm’s U.S. assets.
3AC Files for Bankruptcy — ‘Tremors’ From the Crypto Market Fall ‘Continue to Reverberate,’ Says JPMorgan Analyst
These reports are based on the following: Three Arrows Capital Ltd.(3) AC was reprimanded and threatened with liquidation by the Monetary Authority of Singapore. This order is based on the British Virgin Islands. 3AC has reportedly declared bankruptcy.
Court filings were seen by Bloomberg’s Jeremy Hill and the author published a ReportThis summarized the current situation. Hill stated that 3AC filed for Chapter 15 bankruptcy. This allows the filing of proceedings and provides protection to insolvent companies in multiple countries. Essentially, 3AC wants the bankruptcy recognized in the U.S., in order to protect the hedge fund’s assets located in America.
“Representatives for Three Arrows filed the bankruptcy petition in New York on Friday, court papers show,” Hill explained on Friday. The law firm Latham & Watkins is representing Three Arrows in the U.S. bankruptcy [case],” the reporter added.
3AC’s bankruptcy case was filed in the Southern District of New York in Manhattan. 3AC’s main headquarters are located in Singapore but the co-founder Su Zhu said last April it planned to move to Dubai. The liquidation proceedings against 3AC are being handled by Teneo, an advisory firm.
According to JPMorgan analyst Nikolaos Panigirtzoglou, 3AC’s billion-dollar failure “suggests that the tremors from this year’s crypto market fall continue to reverberate.” Panigirtzoglou continued to say in his investor’s note that there’s many indicators highlighting deleveraged positions.
The JPMorgan executive added that “Indicators like our Net Leverage metric suggest that deleveraging is already well advanced. The fact that crypto entities with the stronger balance sheets are currently stepping in to help contain contagion.”
Voyager Digital’s Friday withdrawals were halted, along with trading, deposits and loyalty rewards. The 3AC bankruptcy comes after Voyager Digital filed for Chapter 11 bankruptcy. Voyager’s debit card was also impacted and Voyager customers are unable to useCards issued by the company.
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