Blockchain venture capital firm Three Arrows Capital is insolvent and is being liquidated

U.S. Bankruptcy Court for the Southern District of New York had ordered the liquidation of Three Arrows Capital after the cryptocurrency hedge fund failed to pay its debts on time.<br><br>The company has been ordered to transfer its assets to the island of the British Virgin Islands for liquidation. The court had also frozen the company’s assets worldwide, pending liquidation.<br><br>The order comes after Three Arrows Capital failed to pay 263 million in debt to Voyager Digital which was enough to push it into bankruptcy.<br><br>The company has been on shaky ground after the value of the cryptocurrency Luna collapsed in May. On June 30, the cryptocurrency lender Voyager Digital sent a notice of default to Three Arrows Capital alleging that the company had failed to make payments on a $650 million loan.<br><br>Following the default, a British Virgin Islands court had ordered the liquidation of the company. Although Three Arrows Capital had filed for bankruptcy in a New York court, the British Virgin Islands court order is now being enforced in the US.<br><br>Three Arrows Capital had also invested in several other cryptocurrency firms which are now also in danger of going under. On July 6, Voyager Digital became the second crypto firm to file for bankruptcy this month after it was unable to recover the debt owed to it by Three Arrows Capital.<br><br>Earlier this month, a cryptocurrency lending firm named Celsius Network had filed for bankruptcy citing the economic downturn and the collapse of the cryptocurrency market.<br><br>Three Arrows Capital had also been accused of mismanaging customer funds by Voyager Digital. While the company has not confirmed or denied the allegations, it has admitted that it is struggling with issues related to liquidity.<br><br>Three Arrows Capital said on July 8 that it was working on a solution to its issues related to liquidity. On the same day, the company started the process of liquidation by transferring its assets to the British Virgin Islands.<br><br>The company’s move had led to Voyager Digital sending a notice of default which eventually led to a court ordering liquidation. While the company initially resisted the liquidation, it is now complying with the court order and transferring its assets for liquidation.<br><br>Three Arrows Capital was established in 2012 as a hedge fund focused on trading foreign exchange markets, before shifting its focus to Bitcoin in 2017. Over time, the company had gained a reputation in the world of cryptocurrency as a venture capital firm that invested in several startups.