A court in the British Virgin Islands ordered the liquidation of Three Arrows Capital (3AC), putting crypto hedge funds in a more serious crisis. Sky news report..
According to the report, Teneo’s restructuring is mandated to handle 3AC restructuring.
Earlier this week, Voyager Digital issued 3AC with a default notice after failing to repay a loan worth approximately $ 660 million, $ 15,250 Bitcoin, and $ 350 million USDC.
3AC hasn’t commented on the decision yet, but many believe it is a crucial moment for the struggling crypto industry. 3 The economic impact of liquidation of AC creditors is unknown.
The verdict comes almost two months after 3AC had its first problem with the LUNA and UST token crashes.
The company reportedly used counterparty funds to acquire significant UST positions at anchors without notifying investors.
Kyle Davies, co-founder and chairman of 3AC, said the company is working to resolve the issue. He added that the company would consider options such as bailouts by another company or the sale of some of its assets.
However, it is unclear how 3AC will proceed due to the imminent forced liquidation.
3AC liquidation could have a spillover effect on the crypto industry
There is no doubt that 3AC liquidation will have a spillover effect on the crypto space, as there are numerous creditors in the industry such as Celsius, Nexo, BitMex, BlockFi and FTX.
Beyond that, its liquidation could also affect future regulations in the cryptocurrency industry.
The new crypto bill proposed by Senators Cynthia Lummis and Kirsten Gillibrand is currently being recommended by crypto space stakeholders.
Separately, Christine Lagarde, president of the European Central Bank (ECB), urged regulators to introduce new laws to guide cryptocurrency activities such as staking and lending.
