3AC Bankruptcy

Three Arrows Capital, Ltd. (3AC) was a crypto investment firm incorporated in the British Virgin Islands (BVI).

What Happened?

Following the onset of the crypto winter, in which a massive sell-off of cryptocurrency led to a downward spiral of trading prices, 3AC’s financial positions became strained, several of the company’s lenders issued notices of default on 3AC’s loan obligations, and creditors began filing petitions for liquidation in BVI. On June 27, 2022, 3AC commenced a liquidation proceeding before the BVI High Court of Justice (Commercial Division), which appointed two “Foreign Representatives” to handle the liquidation and dissolution of 3AC. On July 1, the Foreign Representatives filed a petition in the Southern District of New York seeking relief under chapter 15 of the Bankruptcy Code. On July 28, the Bankruptcy Court recognized the BVI liquidation as a foreign main proceeding pursuant to section 1502(4) of the Bankruptcy Code. The collapse of 3AC has been a major precipitator of other crypto bankruptcies, including Voyager.