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A British Virgin Islands court has ordered the liquidation of Three Arrows Capital Ltd. after creditors sued the cryptocurrency hedge fund for defaulting.

Nichol Yeo, a partner at law firm Solitaire LLP, said Three Arrows Capital is considering its options and seeking legal advice in the British Virgin Islands.

Three Arrows Capital lost in recent weeks due to a dramatic decline in the value of cryptocurrencies. Two forces have reached the digital asset system: broad market sales caused by rising Federal Reserve interest rates and concerns about crypto currencies and firms. The value of the Bitcoin dollar has dropped by more than a third this month.

Two officials from the international law firm Teneo were appointed by the British Virgin Islands to oversee the disposal of property and protection, according to people familiar with the trial. Managers, senior executives Russell Crumpler and Christopher Farmer, joined Teneo after the company acquired financial firm KPMG's Cayman and British Virgin Island restructuring business in January, according to Teneo's website.

Debtors who owe Three Arrows will be able to apply online, people say. He said the process of getting creditors back their property could take a long time, adding that as they noted that the debt transfer order would signal the start of the process.

DRB Panama Inc., a crypto exchange operator Deribit, is suing Three Arrows Capital for debt, according to a court order.

Deribit closed the Three Arrow position on the exchange after the hedge fund violated its financial and equity requirements, according to someone familiar with the matter.

Some hedge fund lenders include its founder Su Zhu, the source said.

The order also said that traders could convert any cryptocurrencies into U.S. dollars. or stablecoins held by a dollar-pegged USD Coin or tether.

Classmates and Wall Street businessmen Mr. Zhu and Kyle Davies started the Three Arrows about a decade ago. It had assets worth approximately $ 3 million under management in April, just before the crypto markets exploded, Mr. Davies told the Wall Street Journal earlier this month.

Three Arrows Capital has invested in Luna, the Lido Staked ether tokens and the Grayscale Bitcoin Trust. Luna collapsed last month when her cryptocurrency sister TerraUSD failed to maintain its value against the dollar, sending ripples into the crypto space. The two coins combined have lost more than $ 60 billion.

Hedge funds such as Three Arrows invested in Grayscale to resolve the difference between the value of trust and bitcoin, the value of which has tried to mimic. Grayscale trading was damaged as the trust faces competition from investment products created for everyday investors. The Grayscale Bitcoin Trust, which has traded at a lower price in bitcoin in the past, has been trading at a 29% discount on bitcoin prices since Monday, according to YCharts data.

Many lenders have complained about the company's failure to repay the loan. Crypto Dealer Voyager Digital Ltd. earlier this week he said the Three Arrows had failed to repay loans linked to massive digital betting. The loan, which includes 15,250 bitcoin and $ 350 million in USD Coin, has reached approximately $ 656 million based on the current value of bitcoin. Voyager Digital said it intends to return its assets and discuss with its advisers legal solutions.

The order for sale was previously reported by Sky News.

Three Arrows Capital worked as a fund manager in Singapore until last year, when it relocated to the British Virgin Islands, which is part of a plan to relocate its operations to Dubai.

Source: yahoo

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