Three Arrows Capital's Dreams of Raising $100M for Their "Starry Night" NFT Collection Shattered

Three Arrows Capital had plans to raise over $100M for investment in the NFT project Starry Night, but these plans will not come to fruition. At the peak of last summer's non-fungible token hype, when the overall sentiment was that institutional interest in NFTs would increase, Three Arrows partnered with NFT collector Vincent Van Dough to launch "Starry Night Capital" a non-fungible token fund that was aiming to raise the money with their NFT collection.

According to DappRadar, which uses on-chain data, the entire Starry Night wallet is worth an estimated $4.2M. 

Three Arrows Capital is a Singapore-based cryptocurrency hedge fund created in 2012, founded by Su Zhu and Kyle Davies as the co-founder. Last summer, they were managing more than $10 billion in cryptocurrency funds, with positions in Bitcoin, ETH, Solana, Axie infinity, and more. 

Amid the NFT mania of last year, 3AC managed to secure a $5M investment into Starry Night from KR1, a U.K based digital assets fund. That investment is now worth $0, according to a KR1 earnings statement released recently. The KR1 company, listed on the Aquis exchange, saw a drop of nearly 80% of its stock over the year. Upset investors are not the only problem faced by Three Arrows Capital. 

According to a crypto trader that goes by the name "Moon Overlord" on Twitter, 3AC sold $40M worth of ETH to keep a $264M loan away from the risk of liquidation. This move did not help 3AC to escape bankruptcy, as they were ordered to liquidate by a court of the British Virgin Islands on June 27, 2022.

This shows that even the most prominent companies involved in NFT collections can fail when the market is uncertain volatility can be the enemy of companies trading on margin, no matter their size.

Author: Garrett Meifert

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