Bloomberg: U.S. Regulators Probe the Bankruptcy of 3AC

U.S. regulators — CFTC and SEC — are probing potential violations by the bankrupt crypto hedge fund Three Arrows Capital (3AC). Bloomberg reported, citing its own sources.

The agencies accuse the firm of misleading investors and failing to register properly.

In July filed for bankruptcy in a New York court. According to Nansen, the hedge fund managed about $10 billion in assets.

News of possible insolvency of 3AC appeared after the crypto market crash and Terra’s collapse in May.

At the end of June the British Virgin Islands court ordered the liquidation of the hedge fund. The case drew in partners from the consulting firm Teneo Restructuring.

According to Bloomberg, Teneo said the 3AC founders Su Zhu and Kyle Davis were not cooperating sufficiently in the proceedings. Lawyers sought in an American court permission to serve subpoenas on the hedge fund’s co-founders through their Twitter accounts and email addresses, as ‘ordinary methods had yielded no results’.

In an interview, Zhu and Davis explained the collapse of 3AC as their own excessive overconfidence.

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