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Three Arrows Capital liquidation ordered by court in British Virgin Islands: source

Legal

www.theblock.co 29 June 2022 07:03, UTC
  
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A court in the British Virgin Islands (BVI) has appointed financial advisory firm Teneo to handle the liquidation of troubled crypto lender Three Arrows Capital (3AC), a person with direct knowledge of the matter told The Block.

New York-based Teneo has been appointed on the orders of the Eastern Caribbean Supreme Court in the BVI's High Court of Justice, said the person. The court order placed 3AC into liquidation on June 27, they said. 3AC didn't immediately respond to a request for comment from The Block. 

As a liquidation handler, Teneo’s main job is to protect the assets of 3AC and understand who its creditors are, according to the person. Teneo is essentially representing creditors. The person declined to comment on who those creditors are and how specifically the court issued an order.

Troubles for 3AC started last month after the implosion of Terra’s ecosystem and it native luna token, which sank to almost zero. The ensuing crypto market turbulence posed more issues for 3AC and — as the Block previously reported – the hedge fund failed to meet margin calls on several exchanges, including FTX, Deribit and BitMEX.

3AC and its co-founders, Zhu Su and Kyle Davies, have remained almost silent on the firm’s woes. Earlier this month, they told the Wall Street Journal in an interview that the company is considering selling off assets and seeking a possible bailout. Singapore-based law firm Solitaire LLP represents 3AC, per the WSJ report.

3AC operated out of Singapore until last year, when it reportedly relocated to the British Virgin Islands.

The person clarified that Teneo will not manage the “insolvency” of 3AC, as reported by Sky News earlier today. Insolvency is a state in which a company exists while liquidation is what a court orders for a firm, the person explained.


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