Crypto Platform Three Arrows Capital Is Now Bankrupt
The rumors have been confirmed. Three Arrows Capital – which long denied it was in any trouble – is not only being forced to liquidate its assets, but it is now filing for Chapter 15 bankruptcy protection according to an official press release.
Three Arrows Capital Is Kaput
The company – just a few weeks ago – liquidated all its assets in the British Virgin Islands. Now, bankruptcy proceedings have concluded in a New York state court. The unique points of Chapter 15 are that the company filing can seek cooperation between both foreign and domestic court systems when financial interests affect U.S.-based customers or operations. In this case, while Three Arrows Capital has investors based in the United States, the company is headquartered in outside territory.
Three Arrows has commented that its business is in full-collapse mode following the extraordinary volatility the digital currency space has been experiencing as of late. The fluctuations in market prices have proven too difficult for the firm to handle, and executives have decided to pull the plug.
A court document explains the following:
By filing the petition to commence this Chapter 15 case (the ‘Chapter 15 Case’), the foreign representatives seek to stay active efforts by individual creditors to seize assets and to preserve the status quo and afford the foreign representatives an opportunity stabilizes the debtor’s estate, preserve the debtor’s assets, and conduct a complete investigation of the debtor, claims against its estate, and its assets, including causes of action.
Three Arrows Capital says that Chapter 15 became the one and only option as it prevents customers from engaging in “destructive” measures to gain their funds back. The company released a statement that reads:
Creditors may pursue a value-destructive race to the courthouse to exercise rights in a manner that would enhance their own position vis-à-vis other similarly situated creditors.
The digital currency market is sinking into oblivion, with losses for the year making those of 2018 (four years ago) look tame. Several exchanges in India, for example – such as Zebpay and Wazir X – say they are experiencing heavy dips in their trading volumes, while many other exchanges – like Coinbase – have been forced to stop all their hiring processes and even terminate employees.
Following in Voyager’s Footsteps
Not long ago, Voyager Digital – a blockchain firm that was tied at the hip to Three Arrows – announced its decision to file bankruptcy. The company said the state of Three Arrows gave it no choice. Chief executive Stephen Ehrlich commented:
This was a tremendously difficult decision, but we believe it is the right one given current market conditions. This decision gives us additional time to continue exploring strategic alternatives with various interested parties while preserving the value of the Voyager platform we have built together. We will provide additional information at the appropriate time.
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