Three Arrows Capital to become latest casualty of crypto crash

The crypto hedge fund Three Arrows Capital has been lined up for liquidation just days after it was accused of defaulting on a multimillion dollar loan to the crypto bank Voyager.

The consultancy firm Teneo confirmed that two individuals from its British Virgin Islands offices had been appointed to oversee the liquidation, after Sky News broke the story.

It also had sizeable leveraged investments in bitcoin, Ethereum and other cryptocurrency assets, all of which have seen falls of up to 60% in the first half of 2022.

Since the failure of Celsius began the second wave of the crypto crash, rumours have swirled that 3AC, which once managed more than $18bn of assets, was insolvent. Last week, Voyager revealed it had an outstanding loan of $650m to the hedge fund, more than four times its available cash. The bank had to freeze customer withdrawals and take out a multimillion-dollar loan from the founder of the cryptocurrency exchange FTX.

3AC did not reply to a request for comment.