Crypto: Three Arrow Capital under investigation

Did Three Arrows Capital overestimate the strength of its balance sheet after its collapse last July? This is what the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) hope to elucidate soon. These US regulators will also check whether the 3AC crypto fund is registered with the agencies or not.

Three Arrows Capital, SEC and CFTC investigation underway

Looks like US regulators never take breaks. If they are not waging legal battles against crypto exchanges like Ripple (XRP), they are opening investigations against personalities or companies. Sam Bankman-Fried and FTX recently joined the latter’s hot issues list.

According to Bloomberg, the CFTC and the SEC are investigating the case of Three Arrows Capital. Did this hedge fund mislead investors about the strength of its balance sheet? Is 3AC not registered with the relevant agencies? If this is the case, there is indeed a violation of regulations.

In general, such break-ins could be costly to Three Arrows Capital. The company would likely face fines and other penalties as a result of this investigation.

Initiation of an investigation into Three Arrows Capital

3AC, a struggling crypto hedge fund

Once upon a time, Three Arrows Capital was a cryptocurrency hedge fund that managed around $3.5 billion in assets. But, the bear market and the collapse of Terra were fatal for this company created by Zhu Su and Kyle Davis. She had to file for bankruptcy last July.

Like Do Kwon, the CEO of Terraform Labs, the two founders of 3AC took to their heels. Indeed, there had indeed been death threats for both. Rumors are swirling about a possible run for the founders of Three Arrows Capital in the United Arab Emirates. Although hidden, they continue to defend themselves on social networks. In court, and the crypto community, they are represented by lawyers.

It should also be noted that the British Virgin Islands court appointed Teneo to liquidate 3AC. And it is said that this advisory firm is overseeing the liquidation of a few tens of millions of dollars of assets from the cryptocurrency investment fund. Only crumbs compared to the $3.5 billion belonging to creditors like Celsius Network and Voyager Digital, themselves currently bankrupt. Be that as it may, many expect this investigation by US regulators to provide another outcome to this disaster.

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