Cryptocurrency hedge fund Three Arrows Capital (3AC) has fallen into liquidation, making the biggest casualty of the so-called “crypto winter” that has rattled the digital currency market for weeks.
According to media reports restructuring firm Teneo has been working in the last few days with the liquidation process. After assessing 3AC assets a new website will be created for creditors who need information on the matter.
On Monday, 3AC defaulted on a loan from Voyager Digital worth more than $670 million. Hours after that Fortune magazine published an article under the title “Crypto hedge fund Three Arrows Capital is an ‘old-fashioned Madoff-style Ponzi scheme,’ quoting research firm FSInsight.
Co-founded by Zhu Su and Kyle Davies, 3AC is one of the most prominent crypto hedge funds.
A slump in the digital currency market, which has seen billions of dollars wiped out in recent weeks, had also a major impact on 3AC, exposing a liquidity crisis at the company.
Other cryptocurrency companies have also faced liquidity issues. According to media reports, lending firm Celsius paused withdrawals citing extreme market conditions. The same happened for cryptocurrency exchange firm CoinFlex, which also failed to repay a $47 million debt.
The overall crypto market cap is worth about $950 billion, after peaking at $3 trillion in Nov. 2021.