Cryptocurrency hedge fund Three Arrows Capital (3AC) has filed for Chapter 15 bankruptcy in an effort 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 filing Friday with a court in New York’s Southern District, which is legally protecting the US assets of insolvent foreign debtors from US creditors.
3AC was founded in 2012 by Kyle Davis and Su Zhu and managed approximately $10 billion in assets in March, which later declined to $3 billion in April. Like several other crypto firms, including credit giants Celcius and Babel Finance, 3AC’s turn in fortunes is part of the so-called crypto “winter” that has brought stablecoins down and the value of Bitcoin plummet.
Earlier this week, reports emerged that 3AC has failed to pay a $670 million loan provided by crypto broker Voyager Digital, which has since halted all transactions, deposits and withdrawals. Sky News it later reported that a court in the British Virgin Islands has ordered the liquidation of 3AC and that the company is reportedly working with business consultancy Teneo to oversee the process.
In May, Davies and Zhu admitted in an interview with the WSJ that the company lost a $200 million investment after the crash of Luna and its sister currency TerraUSD. The two remained optimistic about crypto’s prospects at the time, telling the WSJ that they “have always been crypto believers” and “still are”.