Singapore-Based Crypto Fund Files For Bankruptcy In U.S.

According to a court filing on Friday, July 1, Three Arrows Capital (3AC) is seeking protection from creditors in the United States under Chapter 15 of the US Bankruptcy Code, which allows foreign debtors to shelter US assets.

Photo Insert: Singapore-based 3AC is one of the highest-profile investors struck by the steep sell-off in crypto markets and is being liquidated.

Reuters reported on Wednesday, June 29, citing a person familiar with the case, that Singapore-based 3AC is one of the highest-profile investors struck by the steep sell-off in crypto markets and is being liquidated.

According to court filings, 3AC representatives filed a petition in the US Bankruptcy Court for the Southern District of New York on Friday.

Singapore's finance authority accused the struggling fund on Thursday of breaching its asset threshold and giving incorrect information. Non-US corporations use Chapter 15 to prevent creditors from filing lawsuits or tying up assets in the US.

The cryptocurrency catastrophe has worsened in the last week, as big players have faced liquidations, withdrawal freezes, trading halts, and, in one case, a bailout.

Voyager Digital, a cryptocurrency broker, announced the suspension of trading, deposits, and withdrawals on Friday, while BlockFi, a significant digital asset lender, got the backing of exchange FTX US with the potential to be bought. Bloomberg also reported that 3AC's problems had an impact on both companies.

Meanwhile, crypto markets fell further, adding to a drop that has wiped off around US$2 trillion (S$2.8 trillion) in market value.

Much of the industry's current liquidity challenges derive from 3AC's problems, which experienced substantial losses after making large bullish bets on everything from Bitcoin to Luna, a component of the Terra ecosystem whose implosion in May triggered a major market spasm.

The fund, which was founded in 2012 by former Credit Suisse traders Zhu Su and Kyle Davies, has become emblematic of the industry's excesses during last year's bull run, when it accumulated leverage that proved devastating when the market turned.

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