Three Arrows Capital (3AC), the crypto hedge fund company hit hard with the issue of insolvency, has filed for Chapter 15 bankruptcy in the United States Bankruptcy Court, Southern District of New York. The company seeks to stop its US assets from being seized.
Major Development
Three Arrows Capital (3AC), founded by Zhu Su and Kyle Davies, managed an estimated $10 billion of assets as of March, according to on-chain analytic firm, Nansen.
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As the crypto market moved into the bear season and has been lingering, Three Arrows Capital (3AC) has been among the most affected big players in the industry. Other crypto firms like BlockFi and Celsius Network are in similar shoes.
Due to Three Arrows’ liquidity inadequacy, which resulted in its inability to pay clients, the company was issued a liquidation order by a court in the British Virgin Islands (BVI).
While the company’s liquidation takes effect in the British Virgin Islands, the capital venture firm has initiated a move to protect its US assets from being confiscated, by filing a Chapter 15 bankruptcy petition.
To note, Chapter 15 bankruptcy filings stop creditors from seizing a company’s assets in the United States.
Per a report by Bloomberg, the law firm, Latham & Watkins representing Three Arrows Capital (3AC) filed the bankruptcy petition in New York on July 1. The petition is tagged, “Three Arrows Capital Ltd and Russell Crumpler, 22-10920, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).”
Three Arrows Capital (3AC) CEO Seeks Solution
As the problem continues to heat up for the crypto hedge fund, Zhu Su, the co-founder of Three Arrows Capital (3AC) is seeking to offload one of his luxury homes in Singapore in a bid to try and salvage the situation. The said mansion was bought for $35 million, Bloomberg said.
Meanwhile, Nansen, a blockchain analytic firm, has studied the current problem faced by Three Arrows Capital and Celsius Network using on-chain data. The firm stated that the insolvency problems of both companies trace to the de-pegging of TerraUSD (UST) and a subsequent LUNA crash.
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