Crypto hedge fund Three Arrows Capital, also known as 3AC, filed for Chapter 15 Bankruptcy, Bloomberg reported on Friday.
According to blockchain analytics platform Nansen, 3AC has managed as much as $10 billion in assets as of March 2022. While the news of bankruptcy is not unexpected, it brought a shameful end to the prominent, decade-old firm.
Meanwhile, the Chapter 15 bankruptcy enables the international and US court systems to cooperate. In fact, it is typically filed in an effort to protect the debtor's assets.
Three Arrows' bankruptcy filing emerged hours after Voyager suspended trading and withdrawals, citing $646 million worth of unpaid loans from 3AC. Last week on Monday, Voyager issued Three Arrows a notice of default.
"The Debtor's business has collapsed in the wake of extreme fluctuations in cryptocurrency markets," the filing read. Meanwhile, Three Arrows intends "to stay active efforts by individual creditors to seize assets and to preserve the status quo."
"The Debtor's financial distress and the BVI Proceeding have been widely reported and the result of the proceeding has implications on the global digital asset markets," the filing added.
Before its insolvency, 3AC was known for its successful investments in crypto-related ventures. Su Zhu and Kyle Davies founded the company in 2012 and held positions in some of the most significant crypto projects and companies. Its investments include Bitcoin, Ethereum, Solana, Axie Infinity, and BlockFi.
In May, the firm lost around $200 million due to the crash of Do Kwon's algorithmic stablecoin UST. Since then, BitMEX, Detribit, and BlockFi have liquidated 3AC's positions.