The meltdown in cryptocurrency deepened in the past week as major players contended with liquidations, withdrawal freezes, trading halts – and, at least in one case, a bailout.
Crypto broker Voyager Digital on Friday announced a suspension of trading, deposits and withdrawals, while BlockFi, a major digital asset lender, won the backing of exchange FTX US with the potential to be acquired. Both companies were upended by the woes of 3AC.
Now Crypto hedge fund Three Arrows Capital (3AC) is seeking protection from creditors in the United States under Chapter 15 of the U.S. Bankruptcy Code, which allows foreign debtors to shield U.S. assets, according to a court filing on Friday, according to Reuters. Non-US companies use Chapter 15 to block creditors that want to file lawsuits or tie up assets in the United States.
Singapore-based 3AC is one of the highest-profile investors hit by the sharp sell-off in crypto markets and is being liquidated.
Singapore’s financial regulator had accused the embattled fund of exceeding its assets threshold and providing false information.
Meanwhile, crypto markets slumped, adding to a decline that has wiped away some US$2 trillion (S$2.8 trillion) of market value.
„I had begun to think that dominoes had stopped falling in mid-June,” said Mr Aaron Brown, a crypto investor and Bloomberg Opinion contributor. „I suspect by Tuesday morning, there will be more bad news, although I make no specific predictions.”