Three Arrows Capital Ordered to Liquidate by British Virgin Islands Court

A court in the British Virgin Islands (BVI) appointed financial advisory firm Teneo to oversee the liquidation trouble crypto hedge fund Three Arrows Capital (3AC) is currently entrenched in, according to The Block. 

Teneo has been appointed on the orders of the Eastern Caribbean Supreme Court in the BVI’s High Court of Justice, the report said. The court placed 3AC into liquidation on June 27. 

Teneo’s primary jobs are to help facilitate the liquidation, protect the assets of 3AC and understand who their creditors are. In other words, Teneo is representing the creditors to make sure the liquidation runs smoothly and accurately. 

3AC ran into problems last month after the Terra Luna ecosystem crashed, which sent two of its cryptocurrencies, UST and LUNA, into a nasty downward spiral. Those two coins dropped in value by 99% in the course of a week, which further contributed to an overall market crash. 

Unfortunately for 3AC, they were exposed to the network in the form of $200 million in LUNA. 3AC co-founder said despite the LUNA crash, they were able to overcome that. However, they weren’t able to account for the ensuing market crash which sent the majority of the top cryptocurrencies, despite the stablecoins, into a steady decline in price. 

On Monday, Voyager Digital issued a notice of default to 3AC, for failure to repay their loan worth about $650 million. 

3AC currently operates out of the British Virgin Islands, a decision made last year, when they moved from Singapore. 3AC also announced plans to relocate to Dubai, a growing crypto hub in the world. While 3AC announced their plans, Dubai regulators confirmed no effort was made on 3AC’s behalf to relocate. Perhaps they knew they were going to run into trouble before that opportunity. 

This is just the latest series of events which has cast a shadow on the short-term digital assets industry outlook. 

Author: Tyler Irvin

Related Articles