$10 Billion Crypto Venture Capital Fund ‘3AC’ Reportedly Liquidated by BVI Court

Troubled crypto hedge fund Three Arrows Capital (3AC) has been ordered into liquidation by a court in the British Virgin Islands, according to a news report published amid the 2022 crypto crisis.

The order came on June 29, the same date that crypto asset broker Voyager Digital issued a notice of default to 3AC for its failure to pay its 15,250 Bitcoin and 350 million USDC loan. Voyager’s shares had plunged after it disclosed its exposure to 3AC.

3AC Liquidation Marks ‘Significant Moment’ in Sector

Singaporean-based crypto hedge fund 3AC, which was set up in 2012 by partners Su Zhu and Kyle Davies, has been plunged into liquidation amid current crypto market turmoil.

The fund suffered heavy losses as Bitcoin dropped below US$20,000 for the first time in two years and the possibility of insolvency was reported in mid-June after the firm incurred at least US$400 million in liquidations.

Crypto insiders have described the liquidation as “a significant moment in the current unravelling of the cryptocurrency sector, which [had] grown at breakneck speed in recent years”.

3AC’s troubles can be attributed to its significant exposure to Terra’s LUNC token. Reportedly, 3AC’s position of roughly US$200 million in locked Luna Classic evaporated to less than a thousand dollars, with Davies telling The Wall Street Journal that “the Terra Luna situation caught us very much off guard”.

Like many in the space, Twitter user LomahCrypto is of the opinion that 3AC could have acted earlier, tweeting: “I try not to shit on 3AC but ffs I don’t understand how you could tweet some shit like this in May, while your firm is severely underwater and probably at risk of liquidation. Either the self-awareness is nonexistent or this was an actual hint into their operations.”

Nothing to See Here: Founders

As reports run rampant regarding 3AC’s insolvency, the company’s founders continue to assure customers that they are doing their best to find an equitable solution to the current situation. As such, the firm has hired legal and financial advisers to explore assets sales and a possible rescue package by another firm.