British Virgin Islands court mandates liquidation of Three Arrows Capital


A court in the British Virgin Islands has selected Teneo to oversee the liquidation of Three Arrows Capital.

According to a source with firsthand knowledge of the situation, a court in the British Virgin Islands (BVI) has hired financial advice company Teneo to manage the liquidation of failed crypto hedge fund Three Arrows Capital (3AC).

New York-centric The individual said that Teneo was appointed by the Eastern Caribbean Supreme Court to the BVI High Court of Justice. The court judgement liquidated 3AC on June 27, according to the source. 3AC did not immediately reply to The Block’s request for comment.

According to the individual, Teneo’s primary responsibility as a liquidator is to safeguard 3AC’s assets and identify the company’s debtors. In essence, Teneo represents creditors. The individual refused to comment on the identity of the creditors and the specifics of the court’s ruling.

Last month, 3AC had difficulties with the collapse of Terra’s ecosystem and its native luna token, which plummeted to virtually zero. The subsequent crypto market volatility exacerbated 3AC’s problems, and as previously reported by The Block, the hedge fund failed to pay margin calls on many exchanges, including FTX, Deribit, and BitMEX.

3AC and its co-founders, Zhu Su and Kyle Davies, have been mostly mute about the company’s difficulties. In an interview with the Wall Street Journal earlier this month, they said that the corporation is contemplating selling assets and seeking a potential rescue. The Singaporean legal firm Solitaire LLP represents 3AC, according to a story in the WSJ.

Last year, 3AC apparently migrated to the British Virgin Islands from Singapore, where it had previously operated.

Teneo would not handle the “insolvency” of 3AC, as reported by Sky News earlier today, the individual confirmed. The speaker clarified that insolvency is a situation in which a business exists, but liquidation is what a court orders for a corporation.

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