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Crypto hedge fund Three Arrows files for Chapter 15 bankruptcy

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.

Singapore-based 3AC is one of the biggest casualties of the latest so-called “crypto winter” to date. CNBC reported Wednesday that Three Arrows had fallen into liquidation, citing a person with knowledge of the matter.

Representatives for 3AC filed a petition in the U.S. Bankruptcy Court for the Southern District of New York on Friday, according to court documents.

On Thursday, Singapore’s financial regulator had accused embattled the fund of exceeding its assets threshold and providing false information.

Non U.S.-companies use Chapter 15 to block creditors who want to file lawsuits or tie up assets in the United States.

3AC, co-founded by Zhu Su and Kyle Davies, is one of the most prominent crypto hedge funds (which focus on investments in digital assets like cryptocurrencies) around and is known for its highly leveraged bets. Zhu has extremely bullish views on bitcoin.

But a slump in digital currency prices, which has seen billions of dollars wiped off the market in recent weeks, has hurt 3AC and exposed a liquidity crisis at the company.

–CNBC’s Arjun Kharpal contributed to this article.

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