A court in the British Virgin Islands has ordered the liquidation of Three Arrows Capital, the Singapore-based crypto hedge fund.

A report by Sky News claims that Three Arrows Capital (3AC) has been forced into liquidation as a result of a court order in the British Virgin Islands. The report said that global consulting firm Teneo has been entrusted with the insolvency process of 3AC.

Voyager Digital (TSE: VOYG), a listed crypto broker, had issued a default notice on Monday, June 27, to 3AC for its failure to make the required payments on its loan of 15,250 BTC and $350 million USDC.

A person familiar with the situation confirmed to Sky News that a court in the BVI had ordered the liquidation of 3AC on June 27.

An informed person reportedly told CNBC that Teneo was presently at the early stages of the liquidation process, and taking steps to realize whatever assets are in the possession of 3AC. It is later expected to establish a website that will detail the process for settling creditors’ claims.

Bitcoin, the leading cryptocurrency, has fallen over 70% from its all-time high reached in November 2021, inducing a sympathetic decline in the entire crypto market. That crash led to severe losses at various players, including 3AC which was known to make highly leveraged, bullish crypto bets.

These losses in turn led to margin calls which the hedge fund was reportedly unable to pay. Firms such as BlockFi and Genesis are said to have, therefore, liquidated some of 3AC’s positions, raising speculation at the time regarding its ultimate solvency.

Related Story: Three Arrows Capital Served Default Notice, Says Voyager Digital