The crypto hedge fund has filed for bankruptcy under Chapter 15 of the US Bankruptcy Code, which applies to non-US companies.

On Friday, according to a CNBC report, troubled crypto hedge fund Three Arrows Capital (3AC) applied for protection from creditors by filing for bankruptcy in the US under Chapter 15 of the U.S. Bankruptcy Code. The petition was filed in the U.S. Bankruptcy Court for the Southern District of New York on Friday.

3AC has fallen victim to the slump in crypto asset values after November 2021, when bitcoin, the leading cryptocurrency peaked at over $68,000. As this is being written, bitcoin is trading at $19,920.74, down over 70% from that all time high.

3AC also was unable to sustain its highly leveraged and bullish bets on cryptos that resulted in margin calls. Unable to pay up, its positions were liquidated by crypto firms including BlockFi and Genesis.

3AC defaulted on loan repayments to TSE-listed crypto lender Voyager Digital (TSE: VOYG). The latter issued a default notice to 3AC on June 27, the same day that a court in the British Virgin Islands threw the company into liquidation.

Ramifications

Voyager Digital announced on July 1 that it was “temporarily suspending trading, deposits, withdrawals and loyalty rewards, effective at 2:00 p.m. Eastern Daylight Time today.”

It said it was working with Kirkland & Ellis LLP for legal assistance and Moelis & Company and The Consello Group for financial advice.

The so-called “crypto winter” also claimed another casualty in the form of crypto lender Vauld, which halted deposits, withdrawals and trading on its platforms yesterday, citing financial challenges.

Vauld said it was being acquired by Nexo, a London-based crypto lending firm.

Related Story: High Profile Casualty Of The Crypto Meltdown – Hedge Fund Three Arrows In Liquidation