The collapse of the Terra ecosystem triggered the downfall of several other crypto-centric companies, and Su Zhu and Kyle Davies’ Three Arrows Capital was one among them. As of March, 3AC managed around $10 billion in assets, making it one of the most prominent crypto hedge funds. By July, however, the company was already treading on the bankrupt path.
That was just the beginning of Three Arrow Capital’s pain. The company had a long list of counterparties that had their funds tied up in the company. And once the news of 3AC going downhill broke, they all became vulnerable. However, now, they can breathe a sigh of relief.
Liquidators get a nod to probe 3AC’s assets
Three Arrows Capital’s liquidators have secured a critical court decision in Singapore that may give them an insight into the collapsed crypto hedge fund’s remaining assets in a primary jurisdiction. Per Bloomberg,
“The Singapore High Court on Monday granted a petition by advisory firm Teneo, which in June was appointed by a British Virgin Islands court to liquidate Three Arrows, to recognize the liquidation order in the country, the people said, asking not to be named as the proceedings were private. “
Further, according to Bloomberg’s unnamed sources, recognition in Singapore gives the liquidators authority to request access to any financial records the fund kept locally. As such, they lacked the legal basis to do so before getting a nod from the court.
As far as the future outlook is concerned,
“The liquidators plan to focus on establishing what assets held in Singapore — such as bank accounts, properties, cryptocurrencies, nonfungible tokens and stakes in companies — can be tied to Three Arrows itself, they said.”
By July, liquidators had already seized $40 million worth of 3AC assets. Per the company’s bankruptcy court filings, the fund’s assets mainly consisted of bank accounts, cryptos, NFTs, and stakes in digital-asset firms.
It is also worth noting that companies like Genesis that have had exposure to 3AC are bearing the brunt of 3AC’s collapse. Last week, for instance, the NY-based company laid off around 20% of its staff.
Genesis filed a $1.2 billion claim against 3AC for breaching loans in July. And now, on social media, unwarranted speculations that the crypto broker could be the next to fall because of 3AC.
However, a recent report from the company clarified that its balance sheet is “healthy.”
“As we’ve stated publicly, Genesis had loan exposure to Three Arrows Capital. Our parent company DCG assumed the liability related to losses on these loans, leaving our balance sheet healthy so Genesis could continue to be a source of strength for our clients.”