Cryptocurrency hedge fund Three Arrows Capital is being liquidated, a development that is shaking the already fragile market for digital coins and tokens.
Media reports say Singapore-based Three Arrows is being liquidated after defaulting on $675 million U.S. in loans. The media articles state that a court order has been issued to liquidate the Three Arrows hedge fund.
Analysts say the liquidation marks a significant moment for the cryptocurrency sector, which is grappling with a selloff in assets that has accelerated in recent months.
The price of Bitcoin (BTC), the largest digital token, is hovering right around $20,000 U.S. and down more than 50% year to date.
Three Arrows' demise is likely to raise further questions about the viability of the cryptocurrency sector, as well as renew calls for regulatory oversight of digital coins and tokens.
The crisis at Three Arrows was highlighted earlier this week when creditors threatened to issue default notices related to loans worth more than $650 million U.S.
The cryptocurrency market is experiencing a collapse in valuations of assets such as stablecoins that are tied to the U.S. dollar or gold.
Three Arrows Capital was established in 2012. The hedge fund’s problems began earlier this month when it was unable to meet a margin call, which is when an investor must commit more funds to avoid losses on a trade made with borrowed money.
