Three Arrows Capital Liquidation Set In Motion

3AC is said to have been forced into liquidation in the British Virgin Islands by a court order after creditors sued the fund for its failure to meet its commitments during a global market decline.

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Difficult Times Ahead for Three Arrows Capital

3AC, a well-known crypto fund, has failed amid a crypto winter in which investor mood has been affected. After a year of gains, the markets for both well-known cryptocurrencies as well as less known ones have been steadily declining in recent months.

Since its all-time high in November 2021, the price of Bitcoin, one of the most widely used and well-known cryptocurrencies, has dropped by about 60% year to date and 70% from its current level.

In June alone, the price of the digital currency dropped by 37%, sliding below the $20,000 mark. With a significant degree of leverage, 3AC was able to place large bets on numerous cryptocurrencies. Terra USD and Luna, the stablecoins sibling coin, were both heavily invested in by the business.

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Founders Zhu Su and Kyle Davies are tremendously optimistic about Bitcoin and other cryptocurrencies. Rumours of a possible 3AC liquidation were addressed on Twitter by the fund’s co-founder in the weeks leading up to its demise.

Teneo Speeds Things Up

Teneo, a restructuring business, has been brought in to speed up the liquidation and settle any claims creditors may have on 3AC’s assets.

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Cryptocurrency broker Voyager Digital has also revealed the inability to make due payments on a previously reported loan by its operational company, Voyager Digital LLC. For the recovery of the profits, Voyager aims to use 3AC and press it.

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The failure of 3AC has sparked fears that additional funds may be at danger as a result of this. Celsius and CoinFlex, two other crypto-focused businesses, have lately had liquidity and financing concerns, with CoinFlex recently being forced to halt withdrawals for users due to market volatility.

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