Three Arrows Capital liquidator will sell its NFTs

The liquidator of bankrupt crypto hedge fund Three Arrows Capital will sell off the company’s NFTs. Photo illustration of Fortune

The liquidator of failed crypto hedge fund Three Arrows Capital is coming for its precious NFTs.

In an announcement published on Wednesday, liquidator Teneo said the process of offloading the bankrupt firm’s NFTs would begin after March 23 as part of a bid to recoup the $3.5 billion it owes creditors.

Although the announcement did not mention the NFTs to be sold, Tom Wan, a research analyst at 21Shares parent company 21.co, said it may include high-profile NFTs such as CryptoPunks, as well as a Bored Ape, and a couple of Mutant Apes.

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3AC Liquidator, Teneo announced that it will sell its NFT holdings (excluding Starry
night portfolio)

Potential NFTs being sold:
– 11 punks
– 1 BAYC
– MAY 2ND
– 3 other deeds
– 3 Autoglphys
– 8 PEGZ

Teneo & 3AC NFT portfolio @DuneAnalytics :https://t.co/J5DK1KQFhH

— Tom Wan (@tomwanhh) 23 February 2023

The notice specified that non-fungible tokens in Three Arrows’ Starry Night Portfolio of digital collectibles would not be sold as they are subject to a claim in the Eastern Caribbean High Court in the British Virgin Islands.

Starry Night Porfolio was created by Three Arrows Capital founders Kyle Davies and Su Zhu in 2021 when NFTs skyrocketed in value. The fund behind the portfolio, Starry Night Capital, once aimed to raise $100 million, and was able to accumulate NFTs from collections such as Rare Pepe, Fidenza, CrypToadz, along with works by NFT artist XCOPY, according to The Block.

In October, Teneo moved about 300 of the Starry Night Portfolio NFTs worth about 625 Ether, or $1.03 million, to a Gnosis Safe that requires multiple signatures to move the assets.

The news comes as Three Arrows’ bankruptcy proceedings near their eighth month. The firm filed for Chapter 15 bankruptcy in early July to protect its U.S. assets while it undergoes a liquidation of its assets in the Bahamas, Bloomberg reported at the time.

At its peak, Three Arrows managed an estimated $10 billion in assets, but it was among the first major crypto firms to declare bankruptcy last year after it was hit hard by the collapse of stablecoin TerraUSD and its sister cryptocurrency Luna.

The firm’s collapse rippled across the crypto ecosystem, hurting other notable companies like Genesis Global Trading, to which it owes $2.3 billion.

Meanwhile, the firm’s disgraced founders, Davies and Zhu are trying to raise $25 million to fund a new crypto exchange called GTX that would try to capitalize on the growing number of crypto bankruptcies.