According to prior reports from Bloomberg and CNBC, cryptocurrency hedge firm Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy in an effort to shield its US assets from foreign creditors. The application was submitted by representatives of the Singapore-based firm on Friday before a court in the Southern District of New York, which has the authority to legally shield US assets of bankrupt foreign debtors from US creditors.
Kyle Davis and Su Zhu founded 3AC in 2012, which had assets under management of roughly $10 billion as recently as March before they dropped to $3 billion in April. The so-called crypto “winter,” which has destroyed stablecoins and driven the value of Bitcoin down, has also affected a number of other crypto companies, including the titans of lending Celcius and Babel Finance.
Early this week, sources claimed that 3AC had defaulted on a $670 million loan from cryptocurrency broker Voyager Digital. As a result, all transactions, deposits, and withdrawals have now been suspended. Later, Sky News claimed that a British Virgin Islands court has ordered 3AC to be liquidated and that the corporation is apparently collaborating with business consultancy firm Teneo to manage the procedure.
Following the collapse of Luna and TerraUSD, the business missed out on a $200 million investment, Davies and Zhu acknowledged in a May interview with the WSJ. The two at the time expressed to the WSJ that they “still are” and “have always been crypto believers” with regards to the future of cryptocurrency.