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Crypto fund Three Arrows has reportedly been ordered to liquidate

The hedge fund bet on luna and has been hit hard by the collapse in cryptocurrency values..

Crypto winter

Three Arrows Capital has reportedly received a court order to liquidate.

Illustration: Christopher T. Fong/Protocol

Crypto hedge fund Three Arrows Capital has reportedly received a court order to liquidate after creditors sued the company over unpaid debts.

A court in the British Virgin Islands signed an order to liquidate Three Arrows on June 27, Sky News first reported early Wednesday. The hedge fund had a reported $3 billion in assets under management as of April but has been hit hard by collapsing cryptocurrency values.

Three Arrows did not immediately respond to a request for comment. Partners from advisory firm Teneo will advise the liquidation process, according to Sky News.

On Monday, Voyager Digital said Three Arrows defaulted on a crypto loan worth $666 million.

The total value of the crypto market has sunk by about $2 trillion since peaking in November, falling below $1 trillion earlier this month for the first time since January 2021, according to CoinMarketCap.

Three Arrows, also known as 3AC, bet heavily on luna, the token tied to Terraform Labs' UST stablecoin, helping lead a $1 billion purchase of the cryptocurrency in February. Three months later, UST lost its peg to the dollar and the value of luna sank, one of the most significant collapses of the current crypto crash.

Concerns about Three Arrows' solvency have been circulating in the weeks since. The Financial Times reported on June 16 that the firm had failed to meet several margin calls. Kyle Davies, Three Arrows’ co-founder, told the Wall Street Journal earlier this month that the firm is "committed to working things out and finding an equitable solution for all our constituents,” including the possibility of asset sales and a rescue by another firm.

 Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at rdeffenbaugh@protocol.com.
crypto three arrows capital crypto winter luna crypto crash cryptocurrency
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