Three Arrows Capital NFT fundraiser wound up as part of bankruptcy proceedings

Teneo, the liquidation firm handling Three Arrows Capital’s (3AC) bankruptcy proceedings, has revealed that it had taken possession of non-fungible tokens (NFTs) belonging to the embattled digital assets hedge fund.

A Bloomberg report stated that the NFTs were related to Starry Night Capital, a fund created by the 3AC co-founders. The report valued the holdings at about $35 million, a far cry from the $2.8 billion the firm owes its creditors.

Confirming its possession of the digital collectibles, Teneo said it would begin selling the NFTs at fair market value. The fund was created by the trio of Su Zhu, Kyle Davies and Vincent Van Dough (VVD) with the central objective of “investing in the most desired NFTs.”

“We wish to make clear that VVD has co-operated with the joint liquidators in an effort to protect the value of these assets for the benefit of all relevant stakeholders and has sought to ensure that no Starry Night Portfolio assets will be disposed of improperly, or without sanction from the BVI court if required,” the report read.

The NFTs in question exceed 300, and chain data firm Nansen confirmed that the digital collectibles include highly sought-after NFTs such as the Pepe the Frog NFT Genesis which sold for $3.5 million last year.

NFTs previously collected by Starry Night Capital are moving to a Gnosis Safe address.

These NFTs include:
– Pepe the Frog NFT Genesis, sold for 1000 ETH (~$3.5 million) October 5, 2021
– Fidenza #718, sold for 240 ETH (~$1.1 million) November 13, 2021

Some other notable NFTs below👇 pic.twitter.com/8PU13CqMnn

— Nansen 🧭 (@nansen_ai) 4 October 2022

Teneo was appointed by a court in the British Virgin Islands to liquidate the hedge fund’s assets, while a Singapore High Court gave the liquidator even greater powers. 3AC had been operating since 2012, peaking at $18 billion in digital assets before things fell apart in June following Terra’s collapse.

Creditors scan the horizon for hopeful eyes

Court documents reveal that 3AC’s creditors exceed more than 20 well-known firms in the industry, some of which have faced difficult financial problems due to the firm’s implosion. BlockFi, a digital asset lender, halted withdrawals for its clients and has opened discussions with FTX about a potential acquisition, while Voyager and Genesis lent $650 million and $2.36 billion, respectively.

Others include Deribit, Blockchain.com and Finblox, with debt of more than $1 billion. 3AC filed for bankruptcy in the British Virgin Islands and New York and has been horse-trading with liquidators ever since.

“We remain optimistic that such parties will provide access to full records and all relevant information to enable us to fully discharge our responsibilities in the interests of creditors,” said a statement from Teneo back in May.

See: The presentation of the BSV Global Blockchain Convention, NFTs: What Can We Do Better?

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