U.S. Authorities Dig Into Three Arrows Capital’s Collapse

    According to Bloomberg, U.S. regulators are digging into the remnants of the collapsed Three Arrows Capital hedge fund to figure out what caused this year’s cryptocurrency market crash. Once one of the most successful companies in the sector, Three Arrows filed for bankruptcy in July following a massive asset write-down, in part due to the collapse of the Terra blockchain. The Commodity Futures Trading Commission and the Securities and Exchange Commission are currently investigating whether or not investors were misled by Three Arrows Capital about the firm’s financial health.

    Companies and individuals may face financial fines and other penalties if they come under regulatory scrutiny. The whereabouts of the company’s original founders are unknown. NFT Today reached out to Three Arrows Capital for comment, but we did not receive a response from them.

    Previously, the company could boast several billion dollars in assets under management. However, it suffered losses as a result of the May collapse of the Terra blockchain. In the days and weeks after the token’s collapse, the market as a whole collapsed, and Three Arrows Capital went bankrupt because it couldn’t meet margin calls from lenders.

    According to a September report from CNBC, the company had no choice but to sell its assets to cryptocurrency exchange FTX for $1.4 billion. The sale was the result of a “highly competitive” auction that took place over the course of two weeks. The cryptocurrency exchange Binance was one of twenty-two interested parties.

    Share the Article