Three Arrows Capital Creditors is taking back the company’s NFT wallet
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The crypto bankruptcy saga continues to play out in front of investors. Voyager Digital and Celsius made its own news earlier this week. Today, a third bankrupt crypto company, Three Arrows Capital, comes into the spotlight. A tense battle between the company and its creditors is beginning to subside. Creditors are finally starting to gain control of the company’s assets with a little help from a paralegal.
Three Arrows is one of the first companies to fall into complete collapse due to crypto crash. The Singapore-based crypto investment firm had been massively exposed Terra (LUNA-USD) ecosystem, whose own demise caused the broader market to plummet. This exposure was a major point of failure as LUNA prices went from $100 to a fraction of a cent. This caused Three Arrows more than $200 million in losses, many lost margin calls, and eventually bankruptcy.
Owing $3.5 billion to creditors, the company was forced into Chapter 15 bankruptcy protection. But since the company’s initial filing, things have been anything but smooth. In fact, Three Arrows’ founders have made things as difficult as possible.
Creditors tasked with assessing Three Arrows’ assets have been denied access to information from the outset. On their first trip to the company’s Singapore office, creditors found the doors locked, a pile of old mail and no sign of founders Zhu Su and Kyle Davies. Meanwhile, allegations continued to pile up that the two had pulled their own money out of the company for personal protection as it imploded. So far they have not reappeared.
The company has made things as murky and difficult as possible for creditors, obscuring funds and keeping access to assets away from the court. News today, however, shows that the company is unable to maintain its defense.
Three Arrows Capital NFT wallet taken over
Three Arrows Capital and its founders have been pretty smooth throughout their bankruptcy hearings. But this week, it looks like creditors are starting to make some progress.
For several months now, the company has blocked access to its “Starry Night” non-fungible tokens (NFT). Starry Night Capital, the company that distributes the NFTs, was founded as a subsidiary of Three Arrows.
Vincent Van Dough, the pseudonymous entrepreneur who founded Starry Night with Three Arrows, is to thank for the creditors’ repossession of the collection. Van Dough had initiated the transaction of the NFTs to a wallet owned by Teneo. Shortly after Three Arrows filed for bankruptcy, the court granted the creditor group permission to lead Three Arrows’ liquidation.
Van Dough will help Teneo with the sale of the assets. While the company spent $35 million on NFTs for the collection through 2021, the portfolio is now valued at just $840,000.
The Three Arrows Capital news rounds off a period full of liquidation updates. In late September, fellow bankrupt crypto company Voyager Digital announced the end of its own liquidation sale, which led to FTX win an auction for the remaining assets. Earlier this week, Celsius had set dates for the auction of its own remaining assets.
At the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
