Scary Wednesday for the crypto industry continues as Three Arrows Capital (3AC) has been ordered to liquidate by the British Virgin Islands court. The Singapore-based crypto hedge fund enjoyed its prime during the bullish run of cryptocurrencies a year ago. Now, as Bitcoin (BTC) struggles to bounce back after briefly dropping below $20,000, 3AC is late on loan repayments.
One Thing Led to Another for 3AC
Sky News earlier reported that the dissolution of Three Arrows Capital is handled by Teneo Restructuring, a company based in the British Virgin Islands. However, the real trouble has been following Three Arrows Capital since Monday, when Voyager Digital sent 3AC a notice of default, saying 3AC is reluctant to pay a $675 million loan.
Su Zhu and Kyle Davies, the leaders of Three Arrows Capital (3AC), have been heavily surrounded by media controversy amid the infamous Terra Luna crash. Apparently, the company recorded an off-putting loss of $200 million.
In addition, Kyle Davies admitted he didn’t expect Do Kwon’s Terra (LUNA) and Terra (UST) would end in a dramatic fiasco and was as straight as an arrow about it: “the Terra-Luna situation caught us very much off guard,” Davies says.
To add insult to injury, an update on Twitter was published, mocking the company name as “Three Errors Capital” instead of Three Arrows Capital.
Eventually, many crypto exchanges like FTX and Deribit liquidated 3AC positions on their platforms, as margin calls were not met. Now, Teneo Restructuring, the company aiding Three Arrows Capital in the liquidation process, is opening a website where investors can make a claim against 3AC.
Be that as it may, the rough crypto storm continues and even the big players of the crypto world have to stay cautious not to fall into the bear trap.