THREE ARROWS CAPITAL
Singapore-based crypto hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy on July 1.
Once a formidable player in the digital asset space, 3AC’s demise seemed to stem from the company’s commitment to the Terra ecosystem, which was behind the failed stablecoin terraUSD. This token lost almost all of its value in May, robbing the crypto market of nearly half a trillion dollars.
3AC was heavily indebted and unable to meet margin calls from counterparties it had borrowed from. As a result, cryptocurrency creditors BlockFi and Genesis Trading have liquidated their positions with the company. According to court documents, 3AC’s creditors claim they owe more than $2.8 billion.
THE CELSIUS NETWORK
On June 12, New Jersey-based cryptocurrency lender Celsius suspended withdrawals and a month later filed for Chapter 11 bankruptcy, leaving a deficit of $1.19% billion on its balance sheet. It was valued at $3.25 billion in a financing round in October.
Celsius encountered complex investments in the wholesale digital asset market. The company had lured retail investors by promising annual returns of up to 18.6%, but struggled to cope with redemptions as cryptocurrency prices crashed.
During the first bankruptcy hearing, Celsius lawyers said its bitcoin mining operations could be a way for the company to repay customers.
Meanwhile, several state regulators are investigating Celsius’s decision to suspend customer withdrawals, Reuters reported.
Also based in New Jersey, crypto creditor Voyager Digital was a crypto rising star, reaching a market cap of $3.74 billion last year. But the collapse of 3AC was a blow to Voyager, which was heavily exposed to the hedge fund. Voyager has filed claims of more than $650 million against 3AC.
Voyager filed for Chapter 11 bankruptcy on July 6, saying it had $110 million in cash and crypto assets. Since then, the US Federal Deposit Insurance Corp. has confirmed it is investigating Voyager’s marketing of deposit accounts for the purchase of cryptocurrencies, which the company advertised as FDIC-insured.
Cryptocurrency exchange FTX and Alameda Research, both founded by billionaire Sam Bankman-Fried, have offered to buy all of Voyager’s digital assets and loans, except for the 3AC loans, and allow Voyager customers to use their FTX account assets. to include. Voyager, however, rejected the offer in a lawsuit, calling it a “low offer.”
On July 8, Singapore-based cryptocurrency creditor Vauld filed a petition in a Singaporean court for protection from his creditors after suspending withdrawals a few days earlier. The company owes its creditors $402 million, according to a report by The Block.
Vauld is backed by billionaire investor Peter Thiel’s Valar Ventures, Pantera Capital and Coinbase Ventures.
In a July 11 blog post, Vauld said she was discussing a potential sale to Nexo, a London-based cryptocurrency creditor, while exploring possible restructuring options.
Facing increased withdrawals and a hit from 3AC, crypto creditor BlockFi signed an agreement with FTX on July 1 that provides BlockFi with a $400 million revolving credit facility, and includes an option that allows FTX to buy the company for a maximum amount of $240 million. .
BlockFi was hit hard by the cryptocurrency crash and implemented multiple cost-cutting measures in June, including reducing its workforce by 20% and lowering executive pay. The company was valued at $3 billion in a financing round last year.